December 20, 1999
To: Administration Committee
From: City Clerk, Audit Committee
Subject: Councillors' Use of Corporate Vehicles
Recommendation:
The Audit Committee recommends the adoption of the following report (November 30, 1999) from the City
Auditor.
The Audit Committee reports, for the information of the Administration Committee, having requested the Commissioner
of Corporate Services, in consultation with appropriate officials, to report directly to the Administration Committee at its
meeting to be held on January 11, 2000 on:
(1) the employees who would be affected by the termination of this program, detailing those who would be entitled to
receive long-term disability payments and those who would be entitled to receive Workers' Compensation payments, and
the cost to the City;
(2) the future employment impact on employees should the program be terminated; and
(3) the suggestions contained in the communication (December 10, 1999) from Councillor Duguid.
Background:
The Audit Committee, on December 13, 1999 had before it the report (October, 1999) from the City Auditor respecting
Councillors' Use of Corporate Vehicles, and recommending that in view of the potential savings that could be realized
from alternative means of transportation, the need to maintain a dedicated fleet of vehicles and full-time staff to provide
transportation services for Members of Council be referred to the Acting Commissioner of Corporate Services and the
Chief Financial Officer and Treasurer for consideration during the 2000 operating budget process.
The Audit Committee's recommendation and actions are noted above.
City Clerk,
Audit Committee
Frances M. Pritchard 392-7033
991213.5
Attachment
Copy sent to: Commissioner of Corporate Services
City Auditor
December 20, 1999
To: Administration Committee
From: City Clerk, Audit Committee
Subject: Councillors' Use of Corporate Vehicles
Recommendation:
The Audit Committee recommends the adoption of the following report (November 30, 1999) from the City
Auditor.
The Audit Committee reports, for the information of the Administration Committee, having requested the Commissioner
of Corporate Services, in consultation with appropriate officials, to report directly to the Administration Committee at its
meeting to be held on January 11, 2000 on:
(1) the employees who would be affected by the termination of this program, detailing those who would be entitled to
receive long-term disability payments and those who would be entitled to receive Workers' Compensation payments, and
the cost to the City;
(2) the future employment impact on employees should the program be terminated; and
(3) the suggestions contained in the communication (December 10, 1999) from Councillor Duguid.
Background:
The Audit Committee, on December 13, 1999 had before it the report (October, 1999) from the City Auditor respecting
Councillors' Use of Corporate Vehicles, and recommending that in view of the potential savings that could be realized
from alternative means of transportation, the need to maintain a dedicated fleet of vehicles and full-time staff to provide
transportation services for Members of Council be referred to the Acting Commissioner of Corporate Services and the
Chief Financial Officer and Treasurer for consideration during the 2000 operating budget process.
The Audit Committee's recommendation and actions are noted above.
City Clerk,
Audit Committee
Frances M. Pritchard 392-7033
991213.5
Attachment
Copy sent to: Commissioner of Corporate Services
City Auditor
STAFF REPORT
November 30, 1999
To: Audit Committee
Administration Committee
From: City Auditor
Subject: Councillors' Use of Corporate Vehicles
Purpose:
This report addresses Councillors' use of corporate vehicles, specifically, the relative cost of alternative service delivery models.
Recommendations:
It is recommended that in view of the potential savings that could be realized from alternative means of transportation, the need to maintain a dedicated
fleet of vehicles and full-time staff to provide transportation services for Members of Council be referred to the Acting Commissioner of Corporate
Services and the Chief Financial Officer and Treasurer for consideration during the 2000 operating budget process.
Background:
As part of the 1999 Audit Workplan approved by Council, Audit Services performed a review of Councillors use of corporate vehicles.
Of the seven former municipalities, only the former City of Toronto and the former Metro provided transportation services to their respective members of
Council through a fleet of vehicles and drivers. The former Metro maintained a fleet of three vehicles (which were owned by the municipality) and four
drivers for Councillors exclusive use. The former City of Toronto maintained a fleet of four vehicles (which were owned by the City), with a staff of five
drivers and one coordinator. In addition to providing transportation services to Councillors, the unit in the former City of Toronto also provided courier
services to other departments when the vehicles and drivers were available.
In January 1998, the Transportation Services Units of the former Metro and the former City of Toronto were amalgamated in the Clerk's Division. Upon
amalgamation, the new unit consisted of ten staff and a fleet of eight vehicles providing transportation services to all Councillors between the hours of
7:00 a.m. and 8:00 p.m. weekdays, with service extended to 11:00 p.m. on Council meeting days.
In the first half of 1999 the transportation service was used 2,345 times, approximately 20 percent (500 trips) of which was used for the delivery of
parcels for Councillors. The level of use in the first half of 1999 would project to approximately 4,700 trips for all of 1999. This is significantly less than
the 7,863 trips taken in 1998 and may be reflective of the fact that Councillors offices and Council meetings have now been fully relocated from Metro
Hall to City Hall, reducing the number of trips between the two locations. As of this year, the Council Transportation Unit has been reduced to six drivers
and six vehicles, reflecting an anticipated reduction in the number of trip requests.
Comments:
There is a significant cost to the City of providing an in-house transportation service to Councillors. The 1999 operating budget for the Council
Transportation Unit is $398,800, consisting of drivers salaries, gasoline, repairs, vehicle lease payments, and general office supplies and equipment. As at
September 30, 1999, actual expenses were $284,419. Total expenses for this year are projected to be $379,225 and it is estimated that approximately
4,700 trips will be taken in 1999. Based on these projections, the actual cost of each trip is approximately $80 in 1999. The preliminary 2000 budget for
the Council Transportation Unit of $348,000 reflects the annualized savings resulting from staff reductions that occurred in 1999 and, as such, is $50,800
lower than the 1999 approved budget.
While we recognize the convenience inherent in maintaining the service, there are more cost effective alternatives than
utilizing corporate cars to provide transportation to Councillors in their conduct of City business. A survey of 13 other
Canadian and large U.S. cities indicates that none of these cities has a pool of vehicles and drivers for Council's exclusive
use. While some of these municipalities pay a taxable monthly car allowance to Councillors, the general practice is for
Councillors to use their own vehicle and to be reimbursed based on the respective city's mileage and parking
reimbursement policy.
An analysis of the relative cost and savings of alternative means of transportation for Members of Council is provided in the tables below. Table 1
provides a comparison of the use of taxis to the current transportation service, while table 2 compares the use of personal vehicles to the present situation.
Both analysis assume 5,000 trips per year and show the cost and savings under different average distance per trip scenarios, and use the preliminary 2000
budget for the Council Transportation Unit. It should be noted that the majority of the trips taken to date in 1999 were to destinations within the
downtown core with the average distance for each trip being between five and ten kilometres.
Table 1 - Comparison of Use of Taxis to Cost of Council Transportation Unit
Average Distance Per Trip
10 km 15 km 20 km
Preliminary 2000 Budget -
Council Transportation Unit $348,000 $348,000 $348,000
Annual Taxi Costs (assuming 5,000 trips) $64,500 $91,000 $118,000
Total Estimated Savings $283,500 $257,000 $230,000
Table 2 - Comparison of Use of Personal Vehicles to Cost of Council Transportation Unit
Average Distance Per Trip
10 km 15 km 20 km
Preliminary 2000 Budget -
Council Transportation Unit $348,000 $348,000 $348,000
Annual Mileage and Parking Costs
- Mileage Reimbursement
(Assuming 5,000 trips) $18,000 $27,000 $36,000
- Parking
(Assuming 2,500 instances) $25,000 $25,000 $25,000
Total Mileage and Parking Costs $43,000 $52,000 $61,000
Total Estimated Savings $305,000 $296,000 $287,000
Conclusions:
The above analyses indicates that maintaining a fleet of vehicles and full-time staff to provide a transportation service to
Councillors is considerably more costly than utilizing taxis or personal vehicles to provide this service. Council could save
between $230,000 and $305,000 annually by discontinuing the in-house service and using taxis and/or personal vehicles
instead.
Access to corporate cars is obviously more convenient than using taxis. However, Council must decide whether the
significant cost premium of using the current in-house service is worth the convenience that it provides. Clerk's
staff have advised that the use of taxis is not appropriate to meet international protocol standards such as when
hosting foreign dignitaries or when representation of the Mayor or City Council is required at various functions.
While we agree that the use of taxis may not be appropriate in such instances, the use of limousines can be rented
on an as-required basis for these occasions.
Should Council decide to retain the in-house transportation service, then a per-trip fee should be calculated on a full cost recovery basis and charged back
to the Councillors global budgets, consistent with the corporate direction of full cost recovery for all services utilized. In either case, the Administration
Committee's recommendations must be referred to the Acting Commissioner of Corporate Services and the Chief Financial Officer and Treasurer for
consideration in the 2000 budget process in accordance with Council policy.
Contact:
Tony Veneziano, Audit Services, Tel-392-8353, Fax-392-3754, Tvenezia@toronto.ca
Jeff Griffiths
City Auditor
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