Facilities, Real Estate, Environment & Energy (FREEE) work across the City with clients and stakeholders to deliver a comprehensive range of facility management, real estate services and sustainability programs in an efficient and effective manner that maximizes the City’s property assets and delivers service excellence.

Budget Notes

Facilities, Real Estate, Environment & Energy work collaboratively and responsibly with our clients to advance the City-wide priorities by protecting and maximizing the City’s property assets and in an innovative and fiscally sustainable manner.

Facilities, Real Estate, Environment & Energy (FREEE) work across the City with clients and stakeholders to deliver a comprehensive range of facility management, real estate services and sustainability programs in an efficient and effective manner that maximizes the City’s property assets and delivers service excellence.

2018 Budget Summary

The total cost to deliver these services to Toronto residents is $195.027 million gross and $125.425 million net.

Through operational efficiencies and increased leasing revenues, the Program is able to fully offset $1.271 million in operating budget pressures arising mainly from inflation in utilities and increases for staff salaries and benefits while maintaining the 2017 service levels.

Fast Facts

  • Manage over 9.7 million square feet of City-owned and operated
  • Facilities Management completes approximately 45,000 building maintenance work orders annually for City-owned
  • Real Estate Services manages over 5,800 properties and 26.5 million square feet of building space in an Asset Portfolio worth $14 billion and manage 1,000+ leases in the portfolio generating over $48 million in annual lease
  • Environment & Energy manages all aspects of energy supply and consumption on behalf of City divisions, monitoring 3,500 energy accounts with a total utilities budget in excess of $33 million.

Trends

  • Facilities Management strives to operate efficiently to maintain a square foot cost allocation that reflects good value for money in a municipal
  • The cost/square foot includes custodial, building repairs & maintenance, security and utilities Costs have stabilized from the use of a mixed service model for custodial and maintenance services, emphasizing a preventive maintenance plan and realizing energy efficiencies.
  • Although the division has experienced cost pressures, a number of efficiency measures have been identified which will allow the division to maintain a cost/square foot at the rate of inflation.

Key Service Deliverables for 2018

Facilities, Real Estate, Environment & Energy protects, maintains and maximizes the City’s investment in its public buildings and real property.

The 2018 Operating Budget will enable FREEE to continue to:

  • Maintain City facilities in a clean, safe, and accessible manner as per Council approved maintenance
  • Ensure the City’s property portfolio is optimal and meets program
  • Develop an organizational structure that optimizes preventative and demand maintenance with state-of-good-repair plans and project
  • Reduce energy demand and greenhouse gases and increase use of renewable energy technologies and clean energy generation.
  • Invest in the growth and development of staff through talent management, leadership development, succession planning, mentorship programs, and creating a healthy and positive work
  • Maximize lease revenues by negotiating optimal leasing
  • Coordinate with the Toronto Realty Agency (TRA) as a key component on the new real estate services delivery model.

Our Key Issues & Priority Actions

  • TransformTO has a long-term goal of transitioning to a low-carbon Toronto and the achievement of City Council’s target of 80% reduction in greenhouse gas (GHG) emissions against 1990 levels by the year 2050.
    • Lead cross-corporate implementation of strategies in a way that maximizes public benefit and minimizes harms when designing and delivering climate actions.
  • Unlocking the Value of the City’s real estate portfolio and maximizing the use of City-owned space while meeting client program requirements.
    • Act on opportunities through detailed review, market research and analysis by qualified staff to ensure City’s Real Estate portfolio meets the needs of City Programs and Agencies.
  • Coordination of preventative maintenance, SOGR and energy retrofit projects.
    • Ensure proper coordination of work and service delivery to utilize funding in an efficient manner, minimize impact to staff and public users of facilities, and provide safe and operational City buildings

2018 Operating Budget Highlights

  • The 2018 Preliminary Operating Budget for FREEE is $195.027 million gross and $69.602 million net representing an increase of 0% to the 2017 Approved Operating Budget. The Program achieved the budget target due through the following measures:
    • Line-by-line review savings of $0.358 million.
    • Inflationary user fee increases of $0.031 million.
    • Efficiency savings of $0.883 million.
  • Staff complement will increase by 1.6 from 2017 to 2018.
  • 2017 Service Levels will be maintained.

Facilities, Real Estate, Environment & Energy (FREEE) has lead responsibility for capital preservation, repairs and improvements for 462 City-owned facilities with an approximate replacement value of $4.2 billion including Union Station, covering more than 11.8 million square feet.

The 2018 – 2027 Preliminary Capital Plan of $1.3 billion focuses on addressing core state of good repair and essential lifecycle replacement projects so that all users of City facilities can enjoy safe and functional environments.  The 10-Year Preliminary Capital Plan provides funding to address state of good repair backlog and to implement key service improvements such as the revitalization of Union Station, the redevelopment of St. Lawrence Market North, the Office Modernization Program, and various renewable energy and energy efficiency projects and TransformTO initiative in a manner that maximizes the utility of the City’s capital assets.

Where Does the Money Go?

The 2018 – 2027 Preliminary Capital Budget and Plan totalling $1.298 billion provides funding for:

  • Legislated projects such as environmental remediation and barrier free/accessibility to ensure Accessibility to Ontarians with Disability Act (AODA) compliance.
  • Health and Safety projects for emergency repairs and corporate security.
  • State of Good Repair (SOGR) projects, representing the largest portion of funding, to maintain assets, including structural repairs, re-roofing, and renovations to mechanical and electrical systems.
  • Service Improvements, which is comprised of Energy Retrofit and Renewable Energy Projects and large scale, multi-year redevelopment and revitalization capital projects.

Where Does the Money Come From?

The 10-Year Preliminary Capital Plan requires:

  • Debt funding of $873.044 million (67.3%), reflecting a $201.661 million increase compared to the originally established debt guidelines for investment in key priorities.
  • Provincial/Federal contributions of $9.920 million to fund primarily SOGR projects cost-shared with Toronto Paramedics Services.
  • Recoverable debt of $324.403 million which will be repaid through energy savings realized from sustainable energy projects, and future streams of leasing revenues and/or savings from Union Station and St. Lawrence Market North upon completion.
  • Other sources of funding of $90.267 million that include the use of reserve/reserve funds, development charges and funding from third parties such as Toronto Parking Authority and VIA Rail.

State of Good Repair Backlog

The 10-Year Preliminary Capital Plan includes cash flow funding of $567.749 million for State of Good Repair to address the backlog. The SOGR backlog as a % of asset replacement value will increase from 8.5% in 2018 to 17.3% in 2027, despite this level of funding.

Key Issues & Priority Actions

  • Capital Project Delivery for Major Facilities – Revitalization of major public spaces while facilities remain open to the public.
    • Coordinating efforts with various stakeholders on major capital projects such as Union Station Revitalization and St. Lawrence Market North Re-development
    • Minimizing public disruption, construction delays and scheduling conflicts requires tremendous effort while facilities remain active and open to the public. Public safety and security remain priorities during all phases of construction and development.
  • Capacity to Spend and Readiness to Proceed – The Program has experienced low annual spend rates in the delivery of capital projects in prior years. The low spending rate is mainly attributable to large-scale, multi-year capital projects.
    • Forecasted spending for 2017 is 70% for core SOGR projects. Approximately 95% of the 2017 capital plan has been spent and committed, compared to 78% at the same time last year, demonstrating improvement in capital project delivery from Facilities Management’s Project Management Office.
    • Through the Project Management Office (PMO), build project management skills and use financial forecasting tools and PTP to monitor projects providing increased visibility to identify risks and forecast slippages.

2018 Capital Budget Highlights

The 2018 Preliminary Capital Budget for FREEE of $197.787 million, excluding carry forward funding, will:

  • Enable continued delivery of the Sustainable Energy Program projects, ranging from identifying energy from sustainable sources to providing cleaner alternatives to generating energy from fossil fuels, to implementing energy generation and conservation solutions in facilities to build efficiencies and resiliency.
  • Address State of Good Repair capital work
  • Continue Service Improvement projects including delivery of the Union Station Revitalization, St. Lawrence Market North Redevelopment and Office Modernization Program projects.
  • Enable compliance with Accessibility for Ontarians with Disability Act (AODA) in FREEE’s policies, practices and procedures by 2025.