Office Consolidation Status Report
The Administration Committee recommends:
(1)the adoption of the report (July 19, 1999) from the Chief Administrative Officer;
(2)that alternatives to replace the office space provided currently in Metro Hall be given a high priority and that
this assessment of options include costs and proximity to City Hall, including planning considerations; and
(3)that the Master Plan include comment on additional savings to be achieved through consolidation of the Civic
Centres.
The Administration Committee reports, for the information of Council, having:
(1)requested the Chief Administrative Officer to provide Members of Council with briefing notes on the highlights of the
office consolidation project to date; and
(2)received the communication (July 20, 1999) from the City Clerk respecting the action taken by the Policy and Finance
Committee at its meeting on July 20, 1999, respecting this matter.
The Administration Committee submits the following report (July 19, 1999) from the Chief Administrative Officer:
Purpose:
To report the status of the City of Toronto office consolidation project and to respond to certain directives of the Budget
Committee with respect to costs associated with the renovations to City Hall. Further, this report informs Council that the
Office Consolidation Master Plan is in the developmental stage, and that additional work is required to ensure that the final
document forms the basis for effective decision-making respecting the future office space needs for the City of Toronto.
Finally, this report addresses the project status and recommends a revised approach to finalize the Office Consolidation
Master Plan. The report also discusses the urgent need to proceed with the next stage of the Finance Department office
consolidation.
Funding Sources, Financial Implications and Impact Statement:
Funding in the amount of $2.8 million is required in 1999 to address the urgent need for certain operations within the
Finance Department to be consolidated. Funding for this work is included within the City Hall Floor Renovations project
approved by Council as part of the 1999 capital budget. A breakdown of the approved capital funding and authorized
expenditures, to date, are provided in Appendix A attached to this report. Funding required to complete the balance of
office consolidation will be addressed in the Master Plan and submitted for approval in future reports.
Recommendations:
It is recommended that:
(1)Council adopt, in principle, the revised approach to complete the Office Consolidation Master Plan as outlined in this
report;
(2)the Chief Administrative Officer report by late fall of 1999 on the Master Plan strategy that rationalizes all office
space for the City of Toronto and its Agencies, Boards and Commissions;
(3)the office consolidation of certain divisions of the Finance Department to address concerns from an internal control
perspective, be approved as a priority project with funding of $2.8 million from the 1999 Capital Budget for Office
Consolidation;
(4)Council authorize staff to negotiate an adjustment to the existing contract with Interior Dimensions to provide external
design, planning and construction supervision support to complete the urgent portion of the Finance Department
consolidation; and
(5)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.
Council Reference/Background/History:
At its meeting on February 3 and 4, 1999, Council approved a report entitled "Concept Plan for Office Consolidation"
(SPPC Report No. 2, Clause No. 1). The report outlined a strategy to further reduce office space and improve efficiency of
facilities in use by City staff. The report requested approval of the concept plan in principle and suggested that a Detail
Plan might be submitted by the end of May. Council also approved $6.98 million in capital funding for Phase 2 - Council,
City Hall East Tower Floors 4-12.
The Budget Committee at its meeting on May 25, 1999, requested a report to address the renovations completed and in
progress at City Hall, the details of costs associated with the work, and the cost of renovations to the City Hall office
towers. The Committee also requested a planned renovation schedule and a critical path that will achieve the completion of
City Hall renovations and occupancy of permanent staff by December 2000.
Comments and/or Discussion and/or Justification:
1.0Office Consolidation Status:
1.1Phase 1 - Council, City Hall Floors 2 and 3:
The consolidation of Toronto City Council in one location at City Hall, as an immediate priority, was one of the early
decisions made by the new Council. This decision presented an increased challenge to provide low cost, quality office
space within an ambitious 10-month schedule. Plans now also had to consider potential solutions that would transform a 35
year old building into a functional space and into the legislative and corporate head office for the largest city in Canada
while protecting its unique architectural characteristics.
Progress has been made over the past year toward the restoration of City Hall with the accommodation of the Mayor,
Council and the City Clerk's head office. City Hall also now accommodates the CAO, Commissioners, and key staff in
temporary facilities with renovations of their permanent facilities well underway in the east tower. In addition, 250 staff are
now relocated from City Hall's 2nd floor to other City-owned facilities. The 2nd floor was successfully remodeled and offers
Committee rooms and offices for the Mayor, all 57 members of Council and their staff. In addition, the Council Chamber is
renovated and offers a new communications system. Accessibility to the Council Chamber is also improved with added
walkways and the media have been moved to a new office area. This work comprised Phase 1 - Council, City Hall Floors 2
and 3 for office consolidation and was completed on time, in December, 1998 and on budget at a cost of $6.9 million.
Therefore a portion of the office consolidation work has already been accomplished in advance of the completion of a
guiding master plan. The amalgamation process and the necessity for the City to design and implement its transition in
tandem, did not offer the ability to contemplate how various options might impact future office space requirements.
1.2Phase 2 - City Hall East Tower Floors 4-12:
Phase 2 - Council, City Hall East Tower Floors 4-12 work is now proceeding to accommodate the CAO and the
Commissioners of Urban Planning and Development, Corporate Services, Economic Development, Culture and Tourism,
the Chief Financial Officer and Treasurer and the Executive Director of Human Resources and Amalgamation and their
key staff. Space allocations for the east tower are summarized under Appendix B to this report. The Commissioners of
Works and Emergency Services and the Commissioner of Community and Neighbourhood Services are satisfied to
continue operating out of temporary space at City Hall until the Office Consolidation Master Plan is sufficiently complete.
The accommodation of senior staff in the east tower will effectively relocate them in close proximity to Council. As
previously reported to Council, in order to execute this work, it was necessary to lease swing space to accommodate the
300 previous occupants of floors 4 to 12. Design work is complete and the construction retrofit is now underway. It is
expected that staff will move into their permanent offices in July and August.
The current improvements are modest, but will significantly change the space that has seen only minor upgrades over a
35-year lifespan. Changes should meet the City's needs for at least a decade and include improved security, wider corridors
(to meet CSA standards), new paint and carpeting, improved wiring, lighting and meeting rooms, service and copy areas,
and minor upgrades to the washrooms. File storage rooms (to be operated by the City Clerk) are being created on most
floors, there will be "touch-down stations" for visiting staff, and existing used furniture will be reconfigured to create a
more pleasing environment. It is expected that staff will be more than pleased with the transformation of these floors into
functional workspace. This work is proceeding on time and on budget at a cost of $2.4 million for physical construction
and move-in. The Phase 2 - Council, City Hall East Tower Floors 4-12 work will serve as a useful initial project
benchmark in terms of cost and functionality, and will inform the renovations to the balance of office space within City
Hall.
1.3Balance of Tower Floors and Capital Improvements:
The Budget Committee requested reports that would address details of the work and costs associated with the renovations
to City Hall. Renovations completed and in progress are discussed in the Phase 1 - Council, City Hall Floors 2 and 3 and
Phase 2 - City Hall East Tower Floors 4-12 summaries above. With respect to costs required to renovate the towers, it is
estimated that a further $9.9 million is required to complete physical renovations to the east and west office towers in City
Hall.
In addition, it is clearly evident that other major capital improvements related to the City Hall building envelope and its
ancillary spaces are required. Such improvements relate to the building structural, HVAC, life safety, electrical and
mechanical systems and work is underway to determine the scope of work required. It should be noted that much of this
work relates to capital improvements rather than consolidation and that these estimates will be confirmed in the Office
Consolidation Master Plan and incorporated in the 2000-2001 Capital Budget. The Master Plan will also provide a
meaningful renovation schedule; final cost estimates and a critical path to achieve occupancy of permanent staff in City
Hall and other City facilities.
1.4Lease Terminations:
In its efforts to reduce costs and vacate leased space, the City has successfully terminated 7 office space leases, to
accommodate and move 400 staff into City-owned buildings. These reductions amount to 87,490 square feet and produce
annual savings in the amount of $2,815,395. City office buildings have also accommodated 250 staff from City Hall that
vacated 55,864 square feet net on the 2nd floor. City-owned buildings have also had to absorb 350 temporary Y2K staff. In
total, the City has accommodated 1000 staff within City-owned buildings - that is a requirement of approximately 225,000
square feet, nearly equivalent to the total amount of office space in the York, East York and Etobicoke City Halls
combined. Further details respecting lease terminations since amalgamation are shown in Appendix C to this report.
2.0The Master Plan - Issues and Challenges:
The Office Consolidation Master Plan was to be completed in May, however, a time extension is required to expand the
scope and develop an Office Consolidation Master Plan that will better suit the long-term needs of the City. The work in its
current state, if put forward, would force a still evolving organization into static physical space at extreme risk for
additional cost. In addition, the end solution, perhaps complete by the end of 2000, would carry the burden of lost
opportunity to realize the true potential of this exercise. In fact taking some additional time to reflect on opportunities to
expand the scope will yield more positive results and will better suit the long-term needs of the City.
Significant impacts that have contributed to adjusting the Master Plan process include changes to senior staff, the
continued evolution of the structural reorganization and work processes, results of the initial stacking and blocking
exercise, and the consideration of office stock utilized by the Agencies, Boards and Commissions.
2.1Leadership:
With the resignation of the former Commissioner of Corporate Services, I have recently assumed responsibility for the
Office Consolidation project. In this capacity, I am dedicated to provide overall leadership and guidance to the Office
Consolidation team in accordance with the vision and objectives established for the City of Toronto. Upon assuming this
role, a review of project materials raised many issues in the context of other corporate matters and decisions yet to be made
that will impact final space requirements. I therefore concluded that, in consultation with the Executive Director of
Facilities and Real Estate, an investment of time and a more holistic approach would produce a more meaningful Master
Plan for the City.
2.2Status of Administrative and Organizational Restructuring:
The structural reorganization of the City of Toronto continues to evolve within an environment of rapid change. While
basic departmental and divisional structures were designed in 1998, the incremental design of divisional management
structures is only recently near completion. Staffing of divisional management positions is nearly complete and there has
been a reduction in management staff of approximately 34 percent to the supervisory level. Unanticipated growth has also
occurred as Council introduced new programs to Health, Licensing, and Planning.
The organizational restructuring process at the front line staff levels is in its early stages. This process is complicated by the
fact that these staff also work under historically different conditions. Harmonization will take time as the City takes steps
to fully rationalize the range, level and standard of services. Clearly, the outcome of this phase of the organizational
restructuring and integration, including the associated new policies, new procedures, new practices and new collective
agreements, may have significant impacts on the amount and configuration of office space needed by the City of Toronto.
A more holistic, cross-corporate approach will facilitate close coordination with other relevant City initiatives that may
impact office space related to issues such as:
(i)how will technology assist to create more efficient and flexible office solutions?
(ii)how will alternative service delivery change work processes or impact accommodation requirements?
(iii)how will service level rationalization impact utilization of space?
(iv)how will the concept of one-stop shopping impact space requirements?
(v)what are potential impacts on space of the call centre rationalization and yard rationalization studies?
(vi)how will the work of the ABC Task Force and the Single City Savings Task Force be reflected in the City's space
rationalization strategy?
(vii)are there opportunities to improve citizen access to Councillors and Council processes?
Clearly, there are many corporate issues that address the City's future that are not resolved at this time. It is critical to
consider the implications of these issues and the course they will set for the City, before any further key decisions are made
respecting office consolidation. Initially, it was expected that the structural design information would provide enough of a
blueprint to complete a formalized Master Plan. In hindsight, that data facilitated the development of an office plan without
recognizing the continuous flux in the organization which changes who needs how much space in what facility.
Toronto is moving beyond its initial transition stage from seven to one into a period of building a new City which will meet
needs well into the future. The configuration of office requirements and the rationalization of facilities and holdings are
fundamental to achieving that vision.
2.3Initial Building Assessment and Staff Allocation:
Certain City-owned office buildings initially designated under the concept plan have now been documented respecting
floor areas, workstations and current occupants, capital repair needs, and functionality. Non-staff offices, ancillary uses,
and public areas have also been reviewed including an assessment of requirements to accommodate one stop shopping.
In addition, an inventory and associated value of real estate assets of the City has been identified and work is currently
underway to verify the data collected.
Council's initially conceived vision was that the City Hall location would serve as the City's head office as well as the
public service location for the south district. The detailed planning process, using updated space requirements for all staff
groups, has confirmed that City Hall cannot fully accommodate both roles and more time is required to develop and
evaluate alternative solutions. This review has also revealed that Metro Hall is fully occupied at this time and must
continue to accommodate various office functions until its future can be determined within the context of an overall Master
Plan.
2.4Agencies, Boards and Commissions:
There are potential benefits in increased flexibility and efficiency in considering the office needs and inventories of the
City of Toronto's Agencies, Boards and Commissions. Preliminary work with Toronto Hydro and the Toronto Board of
Education, for example, indicates that certain sites may be available for City use. Consideration of the complete and more
dynamic office portfolio in conjunction with the entire office needs of the City may lead to more effective solutions. The
process suggested in the development of the Master Plan will articulate accommodation requirements of the City as well as
its Agencies, Boards and Commissions.
2.5Completing the Master Plan:
The Office Consolidation Master Plan must provide a blueprint of resources and tasks that will enable the office
consolidation team to accommodate staff in accordance with the needs of the City of Toronto. In many areas, the needs are
still to be developed or refined and a process of due diligence is critical. In this respect, I strongly urge Council to extend
the timeframe established for office consolidation and contemplate the future in the context of corporate goals.
Completion of an effective Office Consolidation Master Plan is predicated on the rationalization of the still evolving
organizational structure. The revised strategy will be a functional, timely and cost-effective process that will involve
effective leadership, an empowered, cross-corporate staff team and steering committee, outside expertise as required, as
well as involvement and support from Council. It is therefore recommended that Council adopt, in principle, the revised
approach to complete the Office Consolidation Master Plan, and that the CAO report by late fall on the Office
Consolidation Master Plan strategy that rationalizes all office space requirements for the City of Toronto and its Agencies,
Boards and Commissions.
3.0Consolidation of the Finance Department:
City Departments continue to operate while the organizational structure evolves into final form. Staff also continue to
operate within changing office space as efforts are made to move towards consolidation. While such structural and physical
change is a challenge to getting the job done, it is proving to be an unacceptable situation in certain areas of the Finance
Department. The Office of the Chief Financial Officer and Treasurer, Budgets, Development, Policy and Research, and
Treasury and Financial Services will shortly be consolidated in their new permanent space in City Hall vacating the 14th
Floor of Metro Hall. However, Accounting Services, Pensions, Payroll and Employee Benefits and Revenue Services are
not accommodated within the scope of the Phase 2 - Council, City Hall East Tower Floors 4-12 work. Following a review
of the situation, the City Auditor concurred with the Chief Financial Officer and Treasurer that from an internal control
perspective, consolidation of the Finance Department is critical at this time. The Chief Financial Officer and Treasurer and
the Chief Administrative Officer also concur that the immediate physical consolidation of certain Divisions within the
Finance Department is critical to ensure that the integrity of the City's financial systems is protected. Further discussions
with the Chief Financial Officer and Treasurer reveal that the Purchasing Division could continue to be accommodated in
their current location until the Office Consolidation Master Plan is finalized, but the balance of the Department needs to be
consolidated as quickly as possible. For internal control purposes, it is recommended that the office consolidation of certain
divisions of the Finance Department as discussed in this report, be approved as a priority project.
In order to accommodate consolidation of the Finance Department, space in City Hall, Metro Hall and the North York
Civic Centre will need to be vacated, reconfigured and reoccupied in a consecutive manner. It is anticipated that the work
will cost $2.8 million and will be completed before year end. It is therefore recommended that funding in the amount of
$2.8 million, for the completion of the urgent portion of the Finance Department consolidation, be approved.
The work that is recommended is composed of the following elements:
(1)To consolidate the Accounting and Pension, Payroll and Employee Benefits Divisions in Metro Hall - $600,000,
comprised of:
(i)Planning and design
(ii)Demolition of private offices on 14th and 15th Floors$400,000.00
(iii)Reconfiguration and intensification
(i)Cabling and electrical$140,000.00
(ii)Staff moves
(i)Contingency$ 60,000.00
(2)To consolidate the Revenue Services Division in North York Civic Centre - $2.2 million comprised of:
(i)Planning and design
(ii)Demolition of space not currently used as office space$1,700,000.00
(iii)Reconfiguration and intensification
(i)Cabling and electrical $250,000.00
(ii)Staff moves
(i)Contingency $250,000.00
Reconfiguration plans are based on the Phase 2 - Council, City Hall East Tower Floors 4-12 program, and it is proposed
that the existing contract with the design consultant, Interior Dimensions, be extended to complete this phase of work. It is
therefore recommended that Council authorize staff to negotiate an adjustment to the existing contract with Interior
Dimensions to provide external design, planning and construction supervision support to complete the urgent portion of the
Finance Department consolidation. The final consolidated locations for those divisions of the Finance Department are
shown in Appendix D.
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Appendix B
City Hall - Lower East Tower
Location Plan
A. Annual Cost Savings from Office Lease Terminations
- space occupied by staff year-end 1997:60,150 s.f.
Total reduction in office space occupied by City staff:143,354 s.f.
plus Health Centre:136,270 s.f.
staff at amalgamation:1,738,123 s.f.
-all floor area figures show net rentable office space, calculated per BOMA methodology
*Although the Housing Company is an agency whose staff are not directly employed by the City, this space reduction is
included here since Housing Company staff are now being accommodated in a City office building (277 Victoria Street)
*These relocations will occur as part of Phase 2. All others are proposed to form Phase 3.
Office consolidation has proceeded on time and on budget with accommodation at City Hall completed for Council, the
Clerk's office and within the next month, the CAO, and some Commissioners and their key staff. The remaining
Commissioners are adequately accommodated in temporary space at City Hall until the Master Plan can be developed. For
internal control purposes, the next phase of the Finance Department's office consolidation must proceed in advance of the
Master Plan at a cost of $2.8 million and will be completed before year end.
With respect to the Office Consolidation Master Plan, a number of events have overtaken the process. The City is still
facing a number of complex and significant issues that must be resolved. Most importantly, the state of the organizational
restructuring, harmonization, and the consideration of office stock utilized by the City's Agencies Boards, and
Commissions will have significant impact on office accommodation. With Council's support, this revised strategy that
embraces a more holistic approach can ensure that the City of Toronto offices support our values, vision and business
strategies to enable the City to serve as a highly effective corporation.
Alan Slobodsky, Sr. Issues Management Coordinator, 395-6459
The Administration Committee, reports for the information of Council, having also had before it a communication
(July 20, 1999) from the City Clerk, advising that the Policy and Finance Committee at its meeting on July 20, 1999, had
before it a communication (May 28, 1999) from the City Clerk, advising that the Budget Committee on May 25, 1999,
amongst other things, requested the Policy and Finance Committee to assign to the Budget Advisory Committee any matter
pertaining to the City Hall renovations and the financial implications thereof, for subsequent recommendations thereon to
the Policy and Finance Committee; and that the Policy and Finance Committee directed that the forthcoming status report
from the Chief Administrative Officer respecting Office Consolidation issues be considered at a joint meeting of the
Administration Committee and the Budget Advisory Committee.
