Backgrounder: City of Toronto modernization initiatives, November 22, 2016

November 22, 2016

The City of Toronto is launching several modernization initiatives to improve service to the public while producing substantial cost savings.

Service Modernization Project

Following an extensive internal review, the City of Toronto will introduce a new service delivery model that incorporates three high-level objectives:

Migrating more service to digital channels via the City’s website, which is being optimized as part of a Web Revitalization Project.
Creating five common service hubs located at corporate civic centres for efficient and effective counter service delivery
Expanding self serve and assisted service to support residents who do not have a computer at home or who wish to continue to visit a City facility.

The benefits of the proposed model include:

Cost savings associated with offering services on the most efficient channels. It currently costs the City $23 for every in-person service, $16 for every phone interaction and $2 for every web interaction.
Improved customer convenience and choice.
Improved access for people with disabilities and the opportunity to bring services closer to vulnerable populations across the City by removing the need to visit a City facility.
Consistent wayfinding and communications.
Consistent service delivery platform with effective and co-ordinated service delivery.

The City projects savings of approximately $8 million beginning in 2021 from moving services from primarily traditional channels (telephone and counter) to digital channels. Through the creation of two new service hubs in 2017, short-term potential cost savings and cost avoidance for 2016-2017 are approximately $1.1 million.

City staff will bring forward a report on this strategy to Government Management Committee and City Council in the first quarter of 2017.

Office Modernization Program

The Office Modernization Program (OMP)began with three pilot projects that aim to change work habits and improve staff engagement, productivity and collaboration while modernizing technology in the work environment. The program optimizes the City’s real estate portfolio with the aim of achieving cost savings and reducing environmental impacts by collapsing leases and avoiding entering into new leases.

The three pilot projects include:

Metro Hall, 15^th floor (completed)
Metro Hall, 2^nd floor (completed)
North York Civic Centre, 1^st floor (construction to begin in January 2017 with completion by May 2017)

The benefits of the OMP include:

Modern and collaborative work environments
Reduction of the City’s office footprint and real estate costs
Attracting and retaining talent by improving employee satisfaction and productivity
Reducing energy consumption and environmental impacts by supporting a smaller footprint and paperless business practices.

Through this project, the City aims to realize cost savings of approximately $4 to $6 million annually through the collapse of 15 other city leases that expire between 2015 and 2020.

As a result of space savings generated by the first two pilot projects (Metro Hall 15^th and 2^nd floors), the City has already saved approximately $1 million annually in gross lease costs by collapsing two leased locations and repatriating those workspaces into City-owned space.

The pilot projects at Metro Hall have resulted in a 40% improvement in employee satisfaction and reduced per employee office space from approximately 170 sf to approximately 130 sf.

A staff report on the Office Modernization Project will be presented to the Government Management Committee and City Council in the spring of 2017.

City-wide Real Estate Program

At the direction of Council, the City retained third-party expertise to conduct a review of the City’s current real estate operating model and provide recommendations for improvement. The subsequent staff report to City Council, which recommended consolidating all real estate entities into a centralized service delivery model, was approved by Toronto City Council on July 12, 2016.

By moving to a centralized operating model, the City of Toronto will:

Make strategic and informed decisions that promote city-building, enhanced asset management and City-wide objectives
Maximize the value of the City’s land and property assets and find savings through co-location and joint ventures
Reduce the City’s state of good repair backlog
Create more mixed-use developments that bring important services closer to residents.
Develop improved technology platforms and streamline work and approval processes
Integrate modernized approaches to space planning to allow for enhanced staff productivity and efficiency.
Provide better solutions through proactive engagement with all stakeholders, including Council, employees and the community.

The City-wide Real Estate Review estimates there is approximately $30 to $60 million of savings (five to 10 per cent) in the $600-million cumulative operating budget of all real estate and facilities management operations (excluding Toronto Community Housing and Parks, Forestry and Recreation) once changes are fully implemented.

In addition, the City would generate revenues estimated at five to 10 per cent of the portfolio value, excluding parkland. This would be achieved through a combination of process improvements, efficiencies in procurement and capital project delivery, improved asset management and utilization, alternative service delivery and portfolio optimization initiatives.

The transition to a centralized model is expected to take two to four years. Immediate next steps include conducting a series of visioning sessions and workshops with key stakeholders, development of a transition strategy and bringing forward a staff report to Executive Committee and City Council in the second quarter of 2017 requesting the adoption of a transition strategy.

Media contact: Natasha Hinds Fitzsimmins, Strategic Communications, 416-392-8889,

natasha.hindsfitzsimmins@toronto.ca