Request for Approval of Funding -

Johnston Donald Associates Inc.,

Sheppard Subway Project

The Corporate Services Committee recommends the adoption of the following report (March15, 1999) from the Commissioner of Corporate Services:

Purpose:

To secure City Council authority for expenditures on real estate services provided by JohnstonDonald Associates Inc., to complete approved contracts.

Financial Implications:

Funds are available as set out below:

(1)Sheppard Subway Project - Capital Budget of the Toronto Transit Commission (TTC) Capital Account No. TC392; and

(2)2 Bloor Street West and Downsview - to be expended from the Commissioner of Corporate Services Departmental Operating Budget.

Recommendations:

It is recommended that:

(1)the continued retention of Johnston Donald Associates Inc., for the completion of the approved contracts respecting the Sheppard Subway Project and other real estate projects for the estimated additional cost of $37,562.00 be approved; and

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

Background:

The former Metropolitan Commissioner of Corporate Services authorized the retention of RobertK.Johnston and Associates to provide consulting negotiation services for the Sheppard Subway Project. For the period January 1, 1996, to June 30, 1997, two separate purchase orders were issued in the amount of $50,000.00 each and during this period $84,708.00 was paid to this firm. The former Metropolitan Council, at its meeting held on May 7 and 8, 1997, approved the retention of the firm Johnston Donald Associates Inc., to continue to provide real estate services with respect to the Sheppard Subway Project and also retained the firm to provide consulting advice on several additional high profile real estate issues including: the Canada Square Arbitration, 2 Bloor Street West, 7 Walmer Road, the acquisition of a Bus Garage Replacement Facility in the former Borough of East York, the coordinating/facilitating role with respect to the Downsview Lands and negotiations with the Province in respect of Transit Subsidies. Council authorized funds in the amount of $135,000.00 for these purposes.

City Council, at its meeting held on April 28 and May 1, 1998, adopted Clause No. 2 of the Corporate Services Committee Report No. 3A, thereby authorizing funds in the amount $115,000.00 be provided for the payment of services being undertaken by Johnston Donald Associates Inc., with respect to the various real estate projects and directed that existing projects be continued until June30, 1998. At its meeting held on July 8, 9 and 10, 1998, City Council in considering Clause No. 29 of Report No. 9 of The Corporate Services Committee, authorized that a further amount of $75,000.00 be provided for completion by Johnston Donald Associates Inc., of approved contracts respecting the Sheppard Subway Project resulting in a total 1998 approved amount of $190,000.00.

Comments:

Johnston Donald Associates Inc., have continued to provide negotiation services with respect to the acquisition of property interests required for the Sheppard Subway Project for those files which they had previously administered. No additional work has been assigned to Johnston Donald Associates Inc., and any new files relative to this project have been assigned internally. In addition, internal staff have assumed more responsibility relative to undertaking certain work on those files which Johnston Donald Associates Inc., continues to administer. I have reviewed this project with Johnston Donald Associates Inc., and it is advisable that they continue to be involved in three outstanding claims until such a time as these claims are resolved. The value of their historic involvement far outweighs the cost to maintain this firms involvement in these three files. In addition, TTC staff have advised the Sheppard Subway Project has a need for periodic updates of property cost estimates for inclusion in monthly project financial reports until the conclusion of the project and that this work can only be undertaken by Johnston Donald Associates Inc., given their extensive background on the project.

With respect to the balance of the files assigned to this firm several have been completed and the only outstanding work is with respect to 2 Bloor Street West and the Downsview Site. Each of these files is in the process of being assumed by internal staff, however, there is significant value to having the history associated with Johnston Donald Associates Inc. available until such a time as the files can be fully assumed by internal staff.

As of 1999, $183,970.00 of the $190,000.00 approved in 1998 had been expended. When it was determined the consultant was approaching the Council approved limit no further accounts were paid and they were requested to limit their hours spent. However, it was simply not possible, due to the ongoing nature of the projects, to terminate all consulting services. Accordingly, we have accrued billings to February 28, 1999 in the amount of $18,591.85 which exceeds the Council authority by $12,561.85. It is worth noting that some of the work undertaken in 1998 was outside of the scope of negotiation services and involved the preparation of several appraisal reports for the service of Section 25 offers of compensation to affected owners with respect to complex partial takings of land. As Johnston Donald Associates Inc. was familiar with the issues at hand and the type of appraisal reports required for service pursuant to the Expropriations Act, it was determined that it was time and cost effective for them to prepare the required Section 25 appraisal reports. This appraisal service together with an opinion of value for Land Transfer Tax purposes respecting these properties, was in the amount of $16,062.00, and was included in their monthly billings.

As stated above no new work has been assigned to Johnston Donald Associates Inc., and they have been instructed to limit their hours spent on the outstanding projects. However, it is prudent to continue Johnston Donald Associates Inc., involvement in the three Sheppard Subway Project files and they have indicated that an additional amount of $10,000.00 will be adequate for their involvement in these three files. TTC staff have suggested that a sum of $10,000.00 be requested to allow for the completion of property cost forecasts to the conclusion of the project. There is also a benefit to accessing the history on the 2 Bloor Street West and Downsview sites and it is estimated that $5,000.00 is adequate for consulting services on these two files. Accordingly, we are requesting that additional authority to expend funds in the amounts set out below be approved:

It is noted that, in order to establish a protocol and to ensure fairness of access to City business, a Request for Proposals (RFP) was issued for the establishment of a roster of prequalified external negotiators required for complex real estate projects. This process is now complete and a report to secure Council approval of a roster of real estate negotiators is being considered by the Corporate Services Committee simultaneously with this report. It is noted that Johnston Donald Associates Inc., is one of the recommended firms.

Conclusion:

The authority to expend additional funds in the amount of $37,562.00 will allow the City to manage these property issues in the most effective and cost efficient manner.

Contact Name:

L.L. Tymkewycz, 392-7207, Fax No. 392-1880, ltymkewy@toronto.ca.