Office Space Consolidation - Concept Plan and

Proposal for Phase 2 Work

The Strategic Policies and Priorities Committee recommends the adoption of the Recommendations of the Sub-Committee - Relocation of All Members of Council to City Hall, embodied in the communication (January 25, 1999) from the City Clerk, viz:

"It is recommended that:

(1)the report (January 25, 1999) from the Commissioner of Corporate Services be adopted;

(2)the Commissioner of Corporate Services clarify in a report to the next meeting of the Sub-Committee - Relocation of All Members of Council to City Hall, that the building at 277 Victoria Street forms part of the Yonge-Dundas Redevelopment Project and has been declared surplus, and as such, should be considered as a temporary location building; and

(3)the Commissioner of Corporate Services provide a progress report on this matter to the Sub-Committee - Relocation of all Members of Council to City Hall every three months."

The Strategic Policies and Priorities Committee reports, for the information of Council, having requested the Commissioner of Corporate Services:

(i)to submit a confidential report to the meeting of Council scheduled to be held on February2, 1999, respecting the property located at 5151 Yonge Street, including information on:

(a)current lease extensions;

(b)the appraised value on today's market;

(c)the impact on neighbouring land assembly; and

(d)the future potential value; and

(ii)to report to the meeting of the Strategic Policies and Priorities Committee scheduled to be held on February 23, 1999, on a process for issuance of an RFP to the private sector which would include all of the following elements:

(a)the sale of Metro Hall and other non-former City Hall buildings;

(b)the building of an adequate building structure(s) on City-owned lands to the North of City Hall or purchase of a connecting building, to permit the relocation of centrally-required City staff from Metro Hall;

(c)better connections to the subway from City Hall; and

(d)a net return to the City.

The Strategic Policies and Priorities Committee submits the following communication (January 25, 1999) from the City Clerk:

Recommendations:

The Sub-Committee - Relocation of all Members of Council to City Hall recommends that:

(1)the report (January 25, 1999) from the Commissioner of Corporate Services be adopted;

(2)the Commissioner of Corporate Services clarify in a report to the next meeting of the Sub-Committee - Relocation of all Members of Council to City Hall, that the building at 277 Victoria Street forms part of the Yonge-Dundas Redevelopment Project and has been declared surplus, and as such, should be considered as a temporary location building; and

(3)the Commissioner of Corporate Services provide a progress report on this matter to the Sub-Committee - Relocation of all Members of Council to City Hall every three months.

Background:

The Sub-Committee - Relocation of all Members of Council to City Hall, on January 25, 1999, had before it a report (January 25, 1999) from the Commissioner of Corporate Services respecting Office Space Consolidation - Concept Plan and Proposal for Phase 2 Work.

During consideration of the foregoing matter, the Sub-Committee also had before it the following reports:

-Clause No. 5 of Report No. 15 of The Special Committee to Review the Final Report of the Toronto Transition Team, titled "Objectives and Principles of Office and Civic Space Consolidation Project, which was amended and adopted by the Council of the City of Toronto at its meeting held on December 16 and 17, 1998; and

-Clause No. 13 of Report No. 26 of The Strategic Policies and Priorities Committee, titled, "City Hall Renovations", which was amended and adopted by the Council of the City of Toronto at its meeting held on December 16 and 17, 1998.

The Sub-Committee's recommendations are noted above.

(Report dated January25,1999, from the

Commissioner of Corporate Services)

Purpose:

To present a corporate Office Consolidation Concept Plan for Council's consideration, along with a proposal and funding request for the Phase 2 work of reconfiguring City Hall's lower East Tower and for Project Start-up including a Detail Plan.

Funding Sources, Financial Implications and Impact Statement:

Office consolidation is an integral part of the amalgamation process as well as an opportunity for the City to reduce its ongoing real estate costs.

Approval of $6,980,000.00 from Transition Funding is requested now for Project Start-up costs and for Phase 2 implementation. Budget estimates for future phases of the Office Consolidation Project will be available from the proposed estimates in the 1999-2003 capital budget when the Detail Plan is completed in May. Under this report's "fast-track" implementation proposal, the full amount will be required before the end of 2000.

Once office consolidation is completed by late 2000 or early 2001 it will have reduced the City's total office space by more than 16 percent, providing annual savings of at least $6 million. In addition, one-time revenues from sale of surplus office properties in 1999 or 2000 are expected to be in the range of $8 - 10 million.

Recommendations:

It is recommended that:

(1)the Office Consolidation Concept Plan as set out in this report be endorsed in principle as the basis for completion of a Detail Plan, to be submitted for Council approval in May together with budget estimates for complete implementation by the end of 2000;

(2)funds in the amount of $4,580,000.00 be provided immediately from Transition Funding as part of the 1999 capital budget, to cover project start-up costs including design work, establishment of a project team, and leasing of temporary office space for the relocation of staff displaced during the office consolidation process;

(3)the Commissioner of Corporate Services be authorized to proceed immediately with Phase2 implementation work as set out in this report, specifically reconfiguration of the lower half of City Hall's East Tower, and that funds in the amount of $2,400,000.00 for Phase 2 be provided from Transition Funding as part of the 1999 Capital Budget;

(4)the Executive Director of Facilities and Real Estate be requested to advise all civic departments, agencies, boards and commissions of the City's intention to dispose of the following City-owned properties unless they are required for municipal purposes: 590 Jarvis Street, 951 Wilson Avenue and 5151 Yonge Street;

(5)the Commissioner of Corporate Services be authorized to enter into a one-year lease, with a one-year renewal option, for up to 75,000 square feet of office space to provide for the temporary relocation of staff displaced during the office consolidation process;

(6)the Sub-Committee on the Relocation of All Members of Council to City Hall, which (based on Council's decision in July, 1998) was reconstituted effective January 1, 1999, as a sub-committee of the Corporate Services Committee, be renamed the Office Consolidation Sub-Committee;

(7)the Commissioner of Corporate Services be requested to submit reports through the Office Consolidation Sub-Committee to the Corporate Services Committee on an ongoing basis with respect to the Plan and its implementation;

(8)the Commissioner of Corporate Services be requested to report through the Office Consolidation Sub-Committee to the Corporate Services Committee within the next two months on options for realizing cost savings from space that will be no longer needed in Metro Hall; and

(9)the Chief Administrative Officer and other appropriate officials be requested to explore with officials from Toronto Hydro and the Toronto Board of Education the potential availability of surplus office space that might assist in meeting the City's needs.

Council Reference/Background/History:

At its meeting of December 16 and 17, 1998, City Council adopted the December 14 "Interim Report on Corporate Office Space Planning and Related Issues" (Clause No. 13 of Report No. 26 of the Strategic Policies and Priorities Committee). Its recommendations called for various issues to be addressed in a further report to be submitted in January 1999, including the following proposals from the Budget Committee:

(1)that no part of the organization be allowed to purchase furniture for at least one year until a complete review of the furniture situation has been conducted, unless such furniture is required to accommodate the needs of a physically challenged person;

(2)that consideration be given to relocating the senior staff, i.e. the Chief Administrative Officer and the six Commissioners, to the lower floors of City Hall, as close as possible to the link, and that the cost of painting, carpeting and other renovations required to facilitate this move be reported to the Sub-Committee - Relocation of Members of Council to City Hall; and

(3)that there be no further expenditures on Toronto City Hall beyond those necessary to complete the originally authorized renovations until all requested reports from the Chief Administrative Officer and the Commissioner of Corporate Services are delivered.

City Council added two further recommendations, that:

(1)the Chief Administrative Officer and the Commissioners be located at City Hall in the immediate proximity of the Members of Council; and

(2)the Commissioner of Corporate Services be requested to submit a report to the next regular meeting of City Council to be held on February 2, 3 and 4, 1999, through the Sub-Committee on the Relocation of All Members of Council to City Hall, and the Corporate Services Committee, on the actual location of the Chief Administrative Officer and the Commissioners within the first few floors of City Hall.

This report addresses the foregoing requests. It is submitted to the Strategic Policies and Priorities Committee, rather than the Corporate Services Committee, as directed by Council, because of the timing required to reach the February meeting of City Council. It is, however, being reviewed by the Sub-Committee on the Relocation of All Members of Council to City Hall immediately prior to its consideration by the Strategic Policies and Priorities Committee.

The report sets out for Council's consideration an Office Consolidation Plan for the City at the concept level, and makes specific proposals for Phase 2 implementation (Phase 1 being the relocation of the Councillors' offices to City Hall). Later reports to the Corporate Services Committee and the Sub-Committee will provide more information and request input on key issues as the Detail Plan is developed.

The report draws on a major analysis of the City's office buildings carried out by NORR Ltd. Architects and Engineers during the second half of 1998, the main components of which were a comprehensive building condition analysis and real estate analysis. It also reflects more recent work by City staff, in consultation with the IBI Group, on the office space available within each building and the future office space needs of the City's six departments.

Comments:

(1)Scope Of Concept Plan:

This report deals with the City's need for general purpose office space - a need that is now met through offices in City Hall, Metro Hall, the five civic centres, other City-owned office buildings and various leased premises.

It does not address the use of office space to deliver services in the community, such as public health centres and welfare offices, except where such services might potentially be relocated to a civic centre or City-owned office building.

It also does not deal with the office space located in other City-owned buildings, such as service yards, recreation centres and fire stations. All of these buildings are under review through other studies, but preliminary indications are that the results will not significantly increase or reduce the City's overall office space needs.

This report focuses on the office space needs of the City's staff. It recognizes, however, that significant areas of City-owned buildings that might otherwise provide staff office space are dedicated to other uses, and flags several policy issues in this regard.

The Office Consolidation Concept Plan is intended to meet the City's office space needs over the next ten years, while recognizing that a high level of flexibility will be required as departmental and program delivery needs evolve.

(2)The Plan's Objectives:

City Council set the objectives for office consolidation at its meeting of December 16 and17, 1998, when it adopted Clause No. 5 of Report No. 15 of The Special Committee to Review the Final Report of the Toronto Transition Team. They are:

(a)to consolidate the office and civic space based on the needs of the new organizational structures of the City of Toronto;

(b)to reduce the overall office space inventory to lower operational costs;

(c)to align the use of the office and civic space with City of Toronto service delivery goals;

(d)to update work space strategies to provide improved productivity;

(e)to implement accountability for space utilization at the Department and Divisional level;

(f)to facilitate the transition into an amalgamated City through the use of space; and

(g)to ensure community access with particular reference to individuals with specific accessibility needs.

The Concept Plan now before you is staff's best advice on how to achieve these objectives while realizing the benefits of amalgamation and enabling the City to begin reducing its ongoing real estate costs. Direction from Council is now required, with particular reference to the continued use of the Civic Centres, so that staff can proceed to prepare the Detail Plan for Council approval in May, 1999.

(3)The Challenges of Office Consolidation:

On January 1, 1998, when the new City came into existence, it had close to 45,000 employees. More than half of these were in programs that were already amalgamated, such as police, TTC and social services. Of the remaining 21,000 who were directly affected by amalgamation, about 7,000 were office workers or field workers who used office space in the Civic Centres, City Hall, Metro Hall and other general purpose office buildings or leased office space. The number of such workers is expected to drop to about 6,000 by the time amalgamation is completed at the end of 2000.

Office consolidation is a critical part of amalgamation that will directly affect most of these six thousand employees. Some will have only minor moves within their existing space, while others may have to change buildings more than once before it is completed. While the process will be very complex and will require up front funding, it will deliver ongoing benefits and savings to the taxpayer.

There are four major challenges for the Office Consolidation Project:

(a)Getting the right people into the right places is the first challenge:

For the departments affected, amalgamation has meant a complete organizational restructuring along with significant downsizing. At this point, the organization is largely restructured but many office workers, in particular, find themselves in the wrong location. People who should be working side by side are in different parts of the City. Some supervisors are spending significant travel time to visit people whose work they should be overseeing on a daily basis. For amalgamation to be completed - and its potential savings and efficiencies realized - this must be rectified.

(b)Capturing the real-estate savings of amalgamation is the second challenge:

By the end of 1999 the City's workforce is expected to be about 2,500 less than it was at amalgamation, with many of the reductions having come from among office workers.

Current estimates are that by the year 2000 the City will need office accommodation for just over 6,000 of its departmental staff. (This number does not include office staff in the City's Agencies, Board and Commissions, nor those who work out of service yards or community offices). This number is significantly smaller than the number of office staff in 1997, before amalgamation, which means the City can reduce its real estate costs by renting less office space and selling surplus buildings. These savings will be realized once the necessary moves have taken place.

(c)Reconfiguration is the third challenge:

Different groups of office workers have different needs when it comes to workspace. Perhaps a plan storage area is required, or a computer room, or larger workstations to accommodate drafting staff. Or some of the staff may be field workers who are only in the office part time and can manage with smaller workstations. The use of demountable partitions reduces the cost of such changes, but some reconstruction is almost always required.

The benefits of teamwork have been widely demonstrated over the past decade or so, and many organizations have reconstructed office areas to facilitate it. The hallmarks of efficient team space are generally a more open plan with fewer private offices, but plenty of meeting rooms and areas for general interaction. Reconfiguration will allow the City to provide the staff groups who need them with improved teamwork environments that will achieve significantly improved performance.

(d)Leveling standards, the fourth and final challenge facing the Office Consolidation Project, is in many ways the most difficult:

The City's Civic Centres and office buildings vary widely in the quality of office environment they provide. Staff throughout the City should have comparable and efficient working conditions, regardless of what building they happen to work in.

The City's challenge is to create a reasonable level of equity in accommodation while still reducing costs through reduced space standards. This may require improvements to building systems, such as air circulation. It may lead to construction of serveries, or central file rooms where floor loadings permit. While the City will redeploy existing workstations and chairs to the maximum degree possible, standards for future procurement must ensure that all acquisitions are ergonomically sound.

Office consolidation is essential for the City to realize amalgamation savings. The Concept Plan below outlines how this can be done.

(4)Responding To The Challenges:

The Principles which guided this Concept Plan appear in Appendix A. They were initially developed by staff, then reviewed, refined and adopted by the Sub-Committee on the Relocation of All Members of Council to City Hall and adopted as amended by City Council at its meeting of December 16 and 17, 1998, (Clause No. 5 of Report No. 15 of the Special Committee to Review the Final Report of the Toronto Transition Team).

Consultants and staff have now thoroughly documented both the existing supply of City office space and the future needs of municipal office staff.

Development of a Concept Plan involves:

(1)deciding which buildings the City needs to keep in the short to medium term; and

(2)fitting the staff, group by group, into the buildings where they can function most effectively.

To meet its needs, the City needs office space in efficient, cost-effective buildings of a reasonable size, both downtown and strategically located in its various districts. Based on these considerations and advice from NORR, various City-owned office buildings were excluded from the space allocation process, specifically: 590 Jarvis St., 951 Wilson Ave., 5248 Yonge St., 5151 Yonge St. and Old City Hall (see Appendix C for details). 75-81 Elizabeth St., which is sub-standard and seen as only a short-term resource, was also excluded from space allocations but is expected to continue providing office accommodation in the short to medium term.

The buildings included in the space allocations are shown on Chart 1. They include all five Civic Centres, subject to whatever further direction City Council may provide, plus City Hall, City-owned office buildings on Victoria Street and in Don Mills, and (in the short term) Metro Hall. One leased property is also included: 112 Elizabeth St., close behind City Hall, where the City's lease runs to 2007. Chart 1 proportionally represents both the total building size and the office space available in each one. Metro Hall accounts for exactly one-third of the office space available for City staff. (Detailed building floor area information appears in Appendix D).

Based on its preliminary assignment of staff groups to these buildings, the Concept Plan can provide five important outcomes:

(i)The Concept Plan is designed to improve public service by providing "one stop shopping" in the Civic Centres:

People expect to come to their local Civic Centre and get information and services about everything the City does.

Every public service provided by the City will be accessible through friendly public service counters conveniently located in the Civic Centres and at City Hall. There should be help for the person wanting a building permit or a parking permit, the one who needs advice on starting a small business as well as the person wanting to make a film in Toronto. Perhaps someone is planning an event in a park, wanting to know more about plans for the empty lot across the street, or simply wanting to pay their taxes. Whatever it is, information or a public service, they should get it here quickly and easily.

The Concept Plan envisages allocating equally prominent space for such "one stop shops" on the main level of City Hall and at the Civic Centres.

The City will continue to maintain more localized offices providing public health, library, welfare, fire protection and other services in the heart of its communities, as well as an extensive network of community centres, all of which should be electronically linked to City Hall and the Civic Centres.

(ii)The Concept Plan is designed to rationalize and reduce the City's office space in a cost-effective way:

One of the Concept Plan's most important deliverables is a reduction in the City's use of office space, with associated cost savings.

Chart 2 tells the story. Before amalgamation, the seven municipalities used 1.76 million square feet of office space for their staff. By the year 2000, the Concept Plan expects this to have dropped below 1.5 million square feet, including a 5 percent vacancy allowance (which is the industry norm for a large organization like the City where there will be ongoing moves and special projects to respond to changing needs and priorities). Further declines, perhaps to as low as 1.4 million square feet, can be expected during the next two years with the winding down of major special projects such as Y2K and the new Financial Information System team.

Post-amalgamation office space reductions have already started to generate financial savings for the City. Since December 1997, six office leases have been terminated and the staff moved into City-owned buildings, providing annual operating savings of nearly $1.8 million. Under the Concept Plan five other leases would also end, eventually bringing the annual savings to more than $3 million (See Appendix B for details).

Surplus City-owned office buildings are another source of savings. Four buildings of various ages and sizes are considered surplus because they cannot contribute cost-effectively to meeting the City's office needs. They include the former police headquarters building at 590Jarvis Street, an office condominium on Wilson Avenue that the City acquired through a tax sale, and two small office buildings on Yonge Street near the North York Civic Centre (see Appendix C for more details). 5248 Yonge Street has recently been put into use as a shelter and may be needed long term by the City for this purpose. Sale of the other three is estimated to realize $8 - 10 million.

There can also be savings from a reduced need for more costly downtown office space. Once the Concept Plan had assigned staff groups to City Hall, the five Civic Centres, the City's office building in Don Mills and other downtown offices on Victoria and Elizabeth Streets, those staff groups not yet allocated (all of which needed to be close to City Hall) had to be provisionally assigned to Metro Hall. They required about 73 percent of the building; however, depending on some other factors discussed below, there may eventually be further reductions.

The City has a range of options in choosing how to capture its Metro Hall savings. It may lease out the surplus space, sell the building but remain as a tenant in the short term, purchase another smaller building closer to City Hall, or rely on leased space in one or more downtown properties. These and other alternatives will be the subject of a further report following investigations and analysis over the next few weeks. However the City chooses to take these savings, they should amount to over $3 million per year.

The buildings retained by the City will each continue to require ongoing capital maintenance. The NORR study's Building Condition Surveys identified a total of about $37 million in capital repair costs for the Civic Centres, City Hall and the other office buildings over the next ten years, only a small part of which would be carried out as part of the Office Consolidation Plan (Appendix E).

The chart below summarizes preliminary estimates of the City's anticipated financial real estate benefits from Office Consolidation. It uses the working assumption that 27 percent of Metro Hall's office space is vacant and temporarily accommodates displaced staff groups in 2000, then is leased out commercially.

There will also be one-time investments required to implement the Plan. A majority of the six thousand office workers will experience at least minor moves. Space will need to be vacated, reconfigured and re-wired to meet the needs of incoming workers. Given the ten year horizon of the Plan, it will be more cost effective for the City to carry out tasks such as carpet replacement now, when the space is vacant. All such decisions will be subject to cost-benefit analysis on a case-by-case basis.

The scale of the Office Consolidation Project is far beyond the normal year-to-year municipal requirements for facility planning. It will require establishment of a special team for the next two years, working in conjunction with the City's regular facilities planners, telecom and IT staff. This is included in the Plan's cost estimates.

The Office Consolidation Plan is expected to cost between $40 - 50 million to implement, based on the preliminary information now available. Associated savings on the real estate side alone will allow the City to recover its costs within about six years. In addition, it allows the City to realise efficiency benefits from staff consolidation. The follow-up Detail Plan report in May will provide solid overall budget estimates and request funding for future phases. In the meanwhile, this report requests $6,980,000.00 for Project Start-Up costs and Phase 2 implementation (see Appendices G and H for details).

The above budget estimates are based on a "no-frills" approach to office consolidation. Reconfigurations will be the minimum needed to provide cost-effective functional space for each staff group, recognizing the ten-year required life span. An estimated 95 percent of work stations used will be existing ones owned by the City.

(iii)The Concept Plan will enable staff who manage district operations to be located in the districts they serve:

The largest municipal government in Canada must stay in close touch with the communities in its various districts to ensure that its services provision meets their varying needs.

The Plan deals with this issue by creating strong district offices for line departments. This is equally true of planners and engineers, parks and buildings staff, revenue collectors and public health managers.

To provide a working model for its very preliminary assignments of staff groups to buildings, the Concept Plan is based on all five of the existing Civic Centres being retained in at least the short term. The question of how many Civic Centres the City will retain in the long term is linked to decisions about the future structure of community councils, which is a policy issue well beyond the scope of this report. A further report on the costs and benefits of retaining individual buildings can be provided if Council wishes to pursue this issue. Obviously City investment in any building should be linked to the anticipated retention period.

Under its working model the Plan places district staff in all five Civic Centres. When assigning space in North York Civic Centre, for example, the Plan treats North District headquarters as its highest priority. Similarly, it ensures that all West District office staff are placed in either Etobicoke or York Civic Centre, while East District staff are based in Scarborough or East York or both. For South District, staff are either in City Hall or another downtown building.

This placement ensures that the staff delivering service in each district will remain in the community and be able to respond to local needs.

(iv)The Concept Plan proposes to fully utilize the Civic Centres as hubs of community activity.

The Concept Plan defines clear roles for the Civic Centres that can keep each as the service hub of its community.

Under its working model, each of the five existing Civic Centres can:

(a)continue as the home of the local community council;

(b)be given a prominent local role through "one stop shopping" centres;

(c)be recognized as the locus of district operations management and service delivery for that part of the City;

(d)house one or more corporate operations; and

(e)be reconfigured to align its office areas with corporate standards.

The presence of other corporate operations is a key component of the Plan. One of its working assumptions was that no staff group that did not need to be downtown would be located there. This both reinforces the importance of the Civic Centres in the life of the City, and helps to maximize savings by reducing the need for downtown office space.

Each Civic Centre would be assigned at least one major corporate function. Under the initial assignments, which are preliminary and may need to be adjusted, Scarborough would become home to most of the City's Information Technology staff, and the newly consolidated Housing Corporation would be relocated to York Civic Centre. Several divisions of Finance would go to North York, while Fleet would be in East York and Facilities and Real Estate in Etobicoke. Appendix F details the Plan's preliminary assignment of staff groups to buildings.

The overall impact of these changes would be to clarify and reinforce the Civic Centres' role in the life of the new City.

(v)The Concept Plan brings together staff who need to work together:

The Mayor and Councillors need ready access to the Chief Administrative Officer and the Commissioners, and vice versa. The Plan will provide this by moving the entire corporate senior management team to City Hall within the next six months.

In order to function effectively, the Chief Administrative Officer and the Commissioners require proximity to their immediate support staff, key policy advisors, and (depending on the nature of their operation) all or part of their departmental senior management team.

All these people need to be in the same tower, with each departmental team together. The Plan achieves this, designating the East Tower of City Hall as "Corporate HQ" for the City.

Other staff units which need five minute access to the senior management or councillors have also been provisionally assigned to City Hall, either in the West Tower or in space remaining in the East Tower. (South District staff would be either in one of the City Hall towers or another downtown building, depending on what fits best for their department).

Not everyone who needs to be readily accessible to Councillors and senior managers can fit into City Hall, so other staff would be in nearby downtown office buildings. The rule of thumb here is "the closer the better", with an upper limit of about fifteen minutes walk. The Legal Division, for example, could not be accommodated within City Hall under the Concept Plan, but must be close by. The staff who oversee and provide central support to operational divisions of Works and Community and Neighbourhood Services need similar proximity; they must be close to City Hall, but not necessarily in the building.

Over the past year each of the merging departments and divisions has reorganized to maximize its efficiency and realise whatever savings it can from amalgamation. The Plan would accommodate this regrouping, ensuring that each cluster of staff who need to be together are located together, adjacent to other groups they interact with frequently, whether in City Hall or another municipal building.

(5)Implementation and Next Steps:

(a)Need for a Fast-Track Timetable:

The City has two basic options for implementing its Office Consolidation Plan:

(i)it can spread implementation over a three to five year period, or

(ii)it can fast-track implementation within two years.

The second option is recommended. It is the fastest way to achieve the real estate savings of office consolidation. More importantly, it is key to getting municipal staff operating smoothly and efficiently under their new post-amalgamation structure.

(b)Project Start-Up and Phase 2 Implementation should Proceed Immediately:

Starting immediately is critical to achieving the fast-track timetable. It is also important to the day-to-day functioning of the City. Council has already recognized the urgency of getting senior management over to join it in permanent quarters at City Hall.

The Plan places senior management in the East Tower of City Hall - Corporate HQ. With the resources now available and the strong desire to get work done by mid-year, staff believe that only half the Tower can be reconfigured at this time. Council has expressed a strong wish for the Chief Administrative Officer and Commissioners to be as close as possible to the second floor, so the lower half of the Tower has been chosen: specifically floors 4 - 12, which lie immediately below the two mechanical floors at level 13. Dividing the Tower in this way has the advantage of minimizing noise and other disruption for those on the upper floors.

Those to be moved into the lower East Tower in Phase 2 include the Chief Administrative Officer, the Chief Financial Officer and Treasurer along with the Budgets, Treasury and Policy groups, the Communications group, Human Resources head office, and the other five Commissioners each with a small group of central policy and administrative staff. The budget for this work includes costs for carpet replacement, painting, and a small amount of construction and reconfiguration of the space. No new work stations will be purchased in Phase 2, but the budget includes re-assembly costs and an allowance for new parts, which are required with almost any reconfiguration (see Appendix H for budget).

Those currently in the lower East Tower who must be relocated include staff from Parks and Recreation, Information Technology, Facilities and Real Estate and Urban Planning. They also include several other groups: the Task Force on Homelessness (whose work is now presumably winding down), ICLEI (the International Council for Local Environmental Initiatives) which is a long-term tenant of the City, and the Polish Congress, which occupies a very small amount of space.

Additional office space will need to be rented to accommodate those who are displaced throughout the Consolidation Project. Although the City has vacant workstations, they are widely scattered and cannot accommodate the 350 relocated staff along with their ancillary facilities (such as the Planning Library and IT server rooms) in any other effective way. The leased space will be no more than 75,000 square feet, and the term of the lease should extend for a year, with the possibility of a one-year renewal (though this may not be needed, since by then blocks of consolidated space should be coming available within City-owned buildings). In 1999, the cost of such leased space will not exceed $1,875,000.00.

The Project Start-Up funds now being requested cover the first moves into temporary space, which are needed now to allow Phase 2 to proceed on schedule, along with incidental moves to other buildings in accordance with the Plan. They also include design services for the lower East Tower and for various other high-priority components of the Plan - notably the One Stop Shopping areas at City Hall and the Civic Centres. Finally, they include setting up a temporary Implementation Team of facility, IT and telecom staff whose job will be to turn the Plan into reality and to look after all the practical details of a series of major moves. (See Appendix G for budget breakdown).

It is therefore recommended that funds be now provided for Project Start-up and for Phase 2 implementation, both as outlined above. Additional funds will be required in 1999 for later phases of the Office Consolidation Project, based on budget estimates to be provided in the Detail Report in May. This is consistent with the 1999capital budget submission for Facilities and Real Estate, which requests a total of $50.5 million for two projects: City Hall renovations ($15 million in 1999; $15million in 2000; $10 million in 2001) and for office consolidation elsewhere ($10.5 million in 1999). This report proposes to treat office consolidation as a single corporate-wide project, including the necessary reconfiguration of City Hall, to be carried out at a total cost of $40 - 50 million in 1999 and 2000.

(c)Next Steps towards a Detail Plan:

The Plan presented in this report is a high level Concept Plan. It provides a solid framework within which the City can begin the office consolidation process, but further work must be done to settle many of the details.

Over the next few months the outstanding matters must be addressed so that firm budget estimates for the Detail Plan can be provided to Council before the summer.

Final Council direction on the future of the Civic Centres is a particularly critical at this point. As requested by City Council, senior City staff have held informal discussions with both the Board of Education and Toronto Hydro about surplus office space that might be made available for the City's use. Potential sites are all well away from the downtown area. This means they may provide suitable cost-effective offices for district staff or those corporate units that are locationally flexible - both now assigned to the Civic Centres - but may not reduce the City's need for downtown office space. Use of such space is, however, an option that should be further explored.

Appendix I provides historic perspective on the municipal need for downtown office space and compares it to the space now available in City Hall.

There are other, less high-profile policy issues that can be addressed through periodic reports to the Sub-Committee on the Relocation of Council Members to City Hall. Last summer this Sub-Committee's mandate was extended to include "all Phase 2 and3 issues including renovation and maintenance items" and its reporting relationship changed to make it a sub-committee of the Corporate Services Committee starting in 1999 (Report No.10 of the Special Committee to Review the Final Report of the Toronto Transition Team, adopted as amended by City Council at its meeting of July 29, 30 and 31, 1998). In recognition of its wider mandate, we recommend that it be renamed the Office Consolidation Sub-Committee.

Among the issues to be settled in the Detail Plan are a corporate space standard, policy and practices about other occupants of potential office space, and various amenity-related issues. Preliminary assumptions about all these were made for the Concept Plan, but they should be re-visited in the next phase of the planning process.

Space Standard:

For purposes of the Concept Plan a general corporate space standard of 225 square feet of rentable office area per workstation was used, with additional allowances for out-of-the-ordinary needs such as libraries and plan storage areas, and a half-workstation allocation for each field staff worker. This proposed standard is below the current corporate average but above what previously prevailed in some of the former municipalities. It is important that there be further review and consensus around the new standard, since it will impact on such factors as working conditions, flexibility to accommodate change, and cost savings.

Non-Staff Uses:

Not all the office and potential office areas in City Hall and the Civic Centres are available for staff office use. Some are assigned to non-profit tenants and related uses such as credit unions, wedding chapels and daycare centres while some are used for councillors' offices. Any reduction in the space used for these purposes would increase potential savings from office consolidation, but such matters can only be resolved with political input. Specific issues include:

(i)whether all councillors should be assigned space in their local Civic Centre or whether other solutions, such as a constituency office elsewhere within the ward, might have both operational and economic advantages;

(ii)whether space in Civic Centres should be leased to politicians from other levels of government for their constituency offices (there is already at least one such request);

(iii)whether the City should reduce the amount of municipal space assigned to non-profit tenants; and

(iv)the future of the Urban Affairs Library; this is currently under review by the Library Board, but City Council should also consider it in context of the corporate Office Consolidation Plan.

Amenities:

The level of amenities currently available to staff in City buildings varies quite dramatically, with some having daycares, fitness centres, serveries, lunch rooms, and purpose built file rooms.

These and other policy issues will be addressed in preparing the Office Consolidation Project's Detail Plan.

(d)Other Questions:

As noted in the Background section of this report, City Council has made a series of requests for information. Two specific requests that have not been addressed in this report were for:

(i)"solid cost estimates on the longevity of any renovations" and

(ii)"how many persons have been relocated to date, and what was the cost per person".

On the first point, the Concept Plan is based on the assumption that any physical alterations should serve the City for at least ten years. This means that staff would avoid alterations that reduce flexibility - for example, working wherever possible with demountable rather than fixed partitions. And they would specify a high standard of durability in all carpeting, finishes and any new workstations required, all within the Plan's general constraint of doing only work that is absolutely necessary. The advice of consultants and the experience of City staff suggests this is the most cost-effective strategy and in the best long-term interests of the taxpayers.

It is impossible to give a definitive answer on the number of moves. With respect to costs, the City's first large-scale move was when Council members and their staff went to City Hall, where the moving cost per person was $600.00. This figure is for the move itself, and does not include any design or alteration costs nor the very substantial amount of time spent by the City's own facilities, IT and telecom staff to make the move happen.

(6)Conclusions:

Office consolidation is an essential part of the amalgamation process and a way for the City to save money.

Office consolidation is a complex undertaking that will affect a great many of the City's six thousand office staff. It will require funding, both for the moves themselves and for the office reconfiguration that needs to take place at the same time. Even with fast-track implementation, as proposed, it will take until the end of 2000 to complete and will cost approximately $40 - 50 million. But once it is completed, the amount of office space used by the City will be reduced by more than 16 percent since amalgamation began, saving more than $6.5 million per year. Even before implementation is over, the City can realize up to $10 million through sale of surplus capital assets. Already, it is saving $1.8 million per year because of leases which have been canceled as staff have moved into City-owned space.

The Office Consolidation Concept Plan presented in this report is designed to:

(i)improve public service by providing "one stop shopping" in the Civic Centre;

(ii)rationalize and reduce the City's office space in a cost-effective way;

(iii)enable staff who manage district operations to be located in the districts they serve;

(iv)fully utilize the Civic Centres; and

(v)bring together staff who need to work together.

Based on Council's direction on the continued use of the Civic Centres, staff will work with the Office Consolidation Sub-Committee between now and May to refine the Concept Plan into a Detail Plan with final cost estimates and final space allocations. In the meanwhile, funds are requested for Project Start-up and for Phase 2 - alterations to the lower East Tower of City Hall to accommodate the CAO, the Commissioners and their immediate staff.

Contact Name:

Simon Chamberlain, Project Director, Office Consolidation, Facilities and Real Estate

Phone No. 392-9697, Fax No. 392-4828, E-Mail: schamber@toronto.ca

Susanne Borup, Executive Director, Facilities and Real Estate, Phone No. 397-4156.

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List of Appendices:

APrinciples for Office Space Consolidation;

BAnnual Cost Savings from Office Lease Terminations;

CCity-Owned Office Buildings not included in the Plan;

DFloor Area Details for Buildings in the Plan;

EFuture Capital Repair Costs;

FPreliminary Assignment of Office Staff Groups to Buildings;

GBudget for Project Start-Up;

HBudget for Phase 2 Work; and

IPast Use of Downtown Office Space by Metro and Toronto.

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Appendix A

Principles for Office Space Consolidation:

(a)convenient service delivery to the public is a key tenet of the office and civic space consolidation;

(b)the consolidation will be achieved in an efficient, effective and cost-beneficial manner;

(c)to reduce costs and advance the implementation, a key tenet will be to move people not furniture;

(d)the space consolidation will be achieved with a minimal number of moves for staff;

(e)space and furniture are corporate resources to be managed by the Corporate Services Department in accordance with the City's priorities;

(f)functional space standards will be utilized to meet project objectives;

(g)Departments are accountable for their use of space;

(h)leased space will be rationalized and reduced wherever possible;

(i)environmental and social objectives will be a key consideration in space planning;

(j)the provision of space for community use will continue to be made a high priority; and

(k)the provision of public space for community use will be considered in the City's program of space consolidation.

The above Principles are contained in a report dated December2, 1998, from the Commissioner of Corporate Services. They were endorsed by the Sub-Committee for Relocation of All Members of Council to City Hall, and by the Special Committee to Review the Final Report of the Toronto Transition Team in Clause No. 5 of its report No. 15. The final two principles were added by City Council when it adopted the Principles at its meeting of December 16 and 17, 1998.

At that meeting, City Council also recommended "that the City of Toronto work co-operatively with the Toronto District School Board in its civic and space consolidation, with a view to co-ordinating space consolidation in ways that may be mutually beneficial, including the exchange of space and properties where merited."

Council also adopted four further recommendations contained in the report. That:

(i)the Sub-Committee - Relocation of All Members of Council to City Hall, report to the Corporate Services Committee, as quickly as possible, on the Phase One and Two Review;

(ii)staff be requested to report back to the Sub-Committee - Relocation of All Members of Council to City Hall, as quickly as possible on a review timetable, and process, which shall include all Civic Centres;

(iii)the Commissioner of Corporate Services review the Access Points at City Hall and the cost of additional furniture for visitor seating; and

(iv)the Commissioner of Corporate Services canvass the Councillors who have received requests for a Citizen's Room; and report back on the status of this process to the Sub-Committee and the Corporate Services Committee.

Appendix B

Annual Cost Savings from Office Lease Terminations:

* Because of existing lease terms, savings will be delayed after Plan implementation at these locations unless the City can find sub-tenants or other ways to realize savings.

** This is not a lease. It represents the office space used by City staff in a City-owned building which the Plan proposes to sell. It is included in this table to ensure that the need to find accommodation for the displaced staff is not overlooked.

# Revised information on Markham Road to come.

Once the above leases are terminated the only remaining City lease of general office space will be at 112 Elizabeth Street (20,000 square feet; cost - $834,306.00 per annum). Since this is a commitment until August 2007 and since it is strategically located close behind City Hall, the Plan has assumed its continuation in at least the medium term, and included it in office space assignments.

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Appendix C

City-Owned Office Buildings not included in the Plan:

The NORR study examined several other City-owned buildings which were not included in the office space assignments of this report:

(a)590 Jarvis Street is a 1953 office building, just south of Bloor Street, that contains approximately 68,000 square feet of office space and was formerly the headquarters of the Metro Toronto Police. The building is currently about one-third occupied by various non-profit organizations as tenants of the City. It is in a deteriorated condition and would require an estimated $6 million in capital expenditures to bring it up to the standards of a modern office building. From a municipal office needs perspective it is poorly located, being neither close to City Hall nor highly accessible to it or to any of the civic centres. While it may play a short term role in the City's office consolidation process during the rest of 1999, it should then be sold following the City's normal circulation process to verify that none of the departments has a requirement for it.

(b)951 Wilson Avenue is a 1989 office condominium of 72,000 square feet, located between Keele and Dufferin Streets, where the City owns fifteen of eighteen units as a result of a tax sale. None of these units are currently used for municipal purposes, and the City has no obvious need for the property. Again, it is proposed that the property, or at least all unrequired units, be sold following the City's normal circulation process.

(c)5248 Yonge Street is a seventy year old 2,800 square foot office building one block north of the North York Civic Centre. This building is too small to be of any real value to the City as a general office building, and would require an outlay of almost $300,000.00 to bring it up to modern office standards. The City has no immediate need of this building for office purposes, but has recently assigned it for use as a temporary shelter for the homeless. If this is a necessary and acceptable ongoing use for the property, the City may wish to retain it; otherwise, it should be sold following the City's normal circulation process.

(d)5151 Yonge Street is a seventy year old 3,500 square foot building at the corner of Yonge Street and Empress Avenue, across from and slightly north of the North York Civic Centre. This building is also too small to be of any real value to the City for general office purposes, and should be sold following the City's normal circulation process.

(e)Old City Hall at 60 Queen Street West is well-located beside City Hall but has been adapted for use as a courthouse and is under lease to the Province of Ontario. It is therefore not currently available for the City's use, and would not provide efficient or cost-effective general office space if it were.

(f)75-81 Elizabeth Street is a fifty-four year old office building immediately behind City Hall that provides 14,000 square feet of office space. Although the building was renovated in the early 1980s, it is seriously substandard and would require an outlay of about $400,000.00 to bring it up to the general level of municipal office space. This building was acquired ten years ago to provide land for construction of a third office tower adjacent to City Hall.

Since 75-81 Elizabeth Street is a substandard building and has no long-term life expectancy, no permanent staff have been assigned to it in the Office Consolidation Concept Plan. It is proposed instead to use the building as a short-term "relief valve" for City Hall, pending a final decision on its future in the context of the next phase of this Plan.

Appraisals conducted for the City last September by CB Richard Ellis (as part of the NORR study) indicated that the City could realistically expect one-time revenue in the $8 - 10 million range from sale of the first three properties.

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Appendix D

Floor Area Details for Buildings in the Plan:

(all areas in square feet)

Table 1 of 2

Gross Floor Area includes shaft space, atria at each floor level, etc. Once these are subtracted a building's floorspace comprises Ceremonial Space, Ancillary Space and Rentable Office Space.

Ceremonial Space includes Council Chambers, Council Committee Rooms and other "ceremonial" type floor area that would not normally be found in a commercial office building.

Ancillary Space includes the building's common space, such as mechanical rooms, parking and loading areas and all basement areas without natural light.

Rentable Office space includes all space within designated office areas, including corridors, washrooms, boardrooms, serveries and other common space. It corresponds to the Building Owners and Managers' Association definition of "net rentable floor area" in the situation where a commercial landlord is renting one or more floors of an office building. It includes potential office areas that are in use for non-office purposes.

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Floor Area Details for Buildings in the Plan

(all areas in square feet)

Table 2 of 2

City Hall W Tower	87,636	3,365	84,271
City Hall E Tower	174,345	9,285	165,060
City Hall Podium	143,210	90,584	52,626
Metro Hall	538,388	20,103	518,285
Don Mills	107,999	21,298	86,701
277 Victoria St	100,798	5,677	95,120
77-79 Elizabeth St	13,778	895	12,883
112 Elizabeth St	20,000	0	20,000
Scarborough CC	187,126	70,314	116,812
Scarborough Health Centre	14,459	0	14,459
North York CC	202,151	11,475	190,676
East York CC	52,581	7,115	45,466
Etobicoke CC	119,185	10,843	108,342
York CC	56,575	11,566	45,009
Totals:	1,818,230	262,520	1,555,710
Less 77-79 Elizabeth Street:			12,883
Available for Staff:			1,542,827

This table shows the portion of rentable office area in each building used for purposes other than staff offices, and the remaining area available for staff use.

The "Others" occupying space in City buildings that might otherwise be available for staff offices include Councillors' offices, daycare centres, credit unions and a variety of other non-profit tenants. A complete list by building can be provided if required.

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Appendix E

Future Capital Repair Costs:

Ten year estimates of total future capital repair costs at City office buildings, as provided by NORR Ltd. study (December 1998), showing adjustment for work that would be undertaken as part of the Office Consolidation Project.

All amounts are thousands of dollars (1998)

O.C. (Office Consolidation) Items include all work included in NORR estimates for capital repair costs in the period 1999 - 2002 which Facilities staff expect would be carried out as part of the Office Consolidation Project and thus eliminated from the capital maintenance budget.

Total: shows NORR's estimate of ten year cost for capital maintenance.

O.C.Items:shows the portion of this work to be done under Office Consolidation Project.

Balance: shows reduced ten year capital maintenance cost.

Appendix I

The Commissioner of Corporate Services gave a presentation to the Strategic Policies and Priorities Committee resespecting the foregoing matter, and filed a copy of her presentation material.

The following Members of Council appeared before the Strategic Policies and Priorities Committee in connection with the foregoing matter:

-Councillor Brad Duguid, Scarborough City Centre;

-Councillor Mario Giansante, Kingsway Humber; and

-Councillor David Shiner, Seneca Heights.