April 23, 1998

  To:Strategic Policies and Priorities Committee

From:City Clerk

Subject:1998 Preliminary Transition Project Requests

 Recommendations:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that:

 (1)funding in the amount of $85.5 million be approved based on the transition projects listed in Attachment 'A' appended to the supplementary report (April 20, 1998) from the Chief Financial Officer and Treasurer and the supplementary listing of projects for Community and Neighbourhood Services distributed at the meeting; and

 (2)funding for all transition projects be referred to the Chief Administrative Officer for review on a project by project basis and that the Chief Administrative Officer submit a report to the appropriate Standing Committee outlining the source of funding and identifying the related savings and budget reductions, prior to consideration by the Budget Committee.

 The Budget Committee reports having requested the Chief Administrative Officer:

 (a)to provide a report to the Budget Committee in July regarding the central computerized call-taking/dispatch system for fire services; and

 (b)to review the matter of the recent exits of key personnel and provide a report to the Corporate Services Committee, in camera, on the procedure being followed with respect to the exit packages being offered to employees.

 Background:

 The Budget Committee on April 20, 1998, had before it the following:

 (a)Report (April 3, 1998) from the Chief Financial Officer and Treasurer presenting the projected 1998 Transition project estimates and outlining a potential funding strategy;

 (b)Letter of Transmittal (March 27, 1998) from the Emergency and Protective Services Committee regarding transition funding for a radio communications system;

 (c)Report (April 2, 1998) from the Fire Chief regarding transition funding for self-contained breathing apparatus;

 (d)Report (April 6, 1998) from the Fire Chief regarding 1998 training transition investment costs for Toronto Fire Services;

 (e)Joint report (April 16, 1998) from the Commissioner of Corporate Services and the City Clerk regarding transitional investments for the City Clerk's Department;

 (f)Report (April 17, 1998) from the Chief Financial Officer and Treasurer regarding financing strategy for transition projects;

 (g)Supplementary report (April 20, 1998) from the Chief Financial Officer and Treasurer regarding 1998 transition projects, funding and savings estimates; and

 (h)Report (April 20, 1998) from the Fire Chief regarding a central computerized call-taking/dispatch system for fire services.

 City Clerk

 Barbara Liddiard/rc/kd

Item No. 3

Attachment

 Sent to:Chief Administrative Officer

 c.Chief Financial Officer and Treasurer

Commissioner of Works and Emergency Services

Fire Chief

Mr. Ross Cuthbert, Finance Department

(Report dated April 3, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

  Purpose:

 To present the projected 1998 Transition project estimates and to outline a potential funding strategy.

 Funding Sources, Financial Implications and Impact Statement:

 In total, the funding requests identified to date for the period from 1998 to the year 2000 are $246.3 million. The 1998 requests submitted total $134.5 million with approximately 8%, or 11.2 Million, of this representing operational type expenditures, which should be funded from current funds if available. A further 29%, or $39.4 million, represents expenditures for which reserve fund or rate financing has been potentially identified. The remaining 62% - or $83.8 million - are identified as capital expenditures for which debt issuance would be appropriate.

 Recommendations:

 1)That this preliminary transition project request listing be received for information.

 2)That a detailed status report on all transition project requests by program area be presented with full details and justification to the next meeting of the Budget Committee.

 Council Reference/Background/History:

 Budget Committee recommendation January 26, 1998, Clause 3(e) as adopted by Council February 5, 1998, directed that a report on transitional projects and potential funding sources for transitional costs required to support the amalgamation process be prepared.

 Comments and/or Discussion and/or Justification:

 Background

 The transition process will extend over a period of several years as the process of changing the City=s infrastructure and processes are made to capture the efficiencies and opportunities of amalgamation. The costs of transition will range from relatively small and straight forward costs - the changing of signage and uniforms, for example, which can be dealt with over a reasonable time frame using normal replacement processes in the operating budget, to large and complex projects, such as wiring up all customer service points to ensure seamless and consistent service across the City.

 Special reviews of all Information Technology and radio system related projects, by the Corporate I.T. staff, will be required to ensure that Corporate standards are maintained, connectivity is maintained and that acquisitions are cost effective.

 Preliminary transition projects have been identified and preliminary potential funding sources have been identified. Appendix >A= summarizes these requests by program and Appendix >B= details the projects.

 Program areas were required to prepare project justifications including the projected costs, anticipated savings and offsets/revenues. In some program areas, these project justifications are not fully complete and require further staff work and reports to justify the request.

 Funding Options

 The funding for transition projects should generally match against the nature of the project.

 Operating Budgets (existing and future)

Equipment, supplies, uniforms, badges, furniture, computer upgrades, licences and software etc. are all normally funded annually in the current budget. These should be used to fund similar transitional costs. As well, certain new costs can be offset against expenditures currently in each budget. For example, new software licences can be (partially) offset by the termination of old licences and staff training budgets should be allocated to training on new systems and processes.

 Debt Financing

Expenditures which result in a long term asset, or whose benefits are long term should be considered for debenture funding.

 Reserve Funds

Reserve Funds could appropriately represent a potential source of transitional funding. For example, Workers= Compensation reserve funds have been recommended to cover one time Worker=s Compensation costs relating to the amalgamation and Employee Benefit reserve funds could be used to help fund workforce reduction and reorganization projects.

 Rate, Fees and Charges

Certain type of projects, in areas normally covered by rates, fees and/or charges may be funded directly from this source.

 Provincial Funding

The Province has announced several funding programs and has recently announced that it is willing to finance certain severance costs for the School Boards. All opportunities should be taken to secure Provincial assistance to help cover these transition costs.

 One-time costs which do not increase operational efficiency should ideally be spread over time and funded from existing budget sources. These would include signage, vehicles, uniforms, operational supplies etc.

 Current Budget allocations exist that should be used (re-prioritized) to fund transitional costs. For example corporate training budgets, including an allocation of $750,000 in the former City of Toronto=s estimates, should be used to fund transitional training requirements.

 Expenditures which will increase operational efficiency are reasonably funded from other sources given the expectation that the Areturn@ on the investment will allow the investment to be repaid or generate savings which will benefit the corporate financial position.

 Conclusions:

 The submissions, many of which are still preliminary in nature and therefore have not estimated direct cost savings, budget offsets, productivity, efficiency or consolidation savings or revenue potential, suggest that over $35 Million in annual savings are achievable. This number will be higher when all submissions are finalized. These savings have been included in the 1998 Budget submissions.

 Contact Name:

 Len Brittain 392-8350

Ross Cuthbert 397-4214

(Letter of transmittal dated March 27, 1998, addressed to the

Budget Committee from the

Emergency and Protective Services Committee)

The Emergency and Protective Services Committee on March 24, 1998 had before it a report (March 24, 1998) from the Fire Chief recommending that:

 (1)transitional funding in the amount of $26 million be approved for a radio communications system; and

 (2)the City of Toronto Fire Services proceed with the implementation of a fully integrated 800 MHZ radio communications system.

 The Committee referred the foregoing report to the Budget Committee for consideration during the budget process.

(Report dated March 24, 1998, addressed to the

Emergency and Protective Services Committee from the Fire Chief)

 Purpose:

 The Fire Services, ultimately must implement an integrated 800 MHZ radio communications system that facilitates seamless operations for coordinated response to emergency incidents across the City of Toronto.

 Funding Sources, Financial Implications and Impact Statement:

 One-time transitional funding is requested. The estimated costs are $1.5 million for the consultants and $19.5 million for infrastructure, equipment and support services.

 Since the original budget submission, a further $5 million has been identified as required for additional in building radio coverage to cover the cost of radio receiver sites and mobile repeaters, and fire station alerting once the engineering design is determined.

 Recommendations:

 It is recommended that transitional funding in the amount of $26 million be approved, and it is further recommended that the City of Toronto Fire Services proceed with the implementation of a fully integrated 800 MHZ radio communications system

 Council Reference/Background/History:

 This project was originally submitted January 8th, in the 1998 Fire Services Capital Budget, and then re-submitted February 18th, when the Transition Projects were removed from the Capital Program.

 Comments and/or Discussion and/or Justification:

 The Fire Departments presently have an existing investment of $7.7 million in 800 MHZ radio communications equipment. York and Toronto were in the process of upgrading from VHF and UHF to 800 MHZ prior to amalgamation, but the projects were postponed. Radio coverage areas for the 800 MHZ systems were designed to operate within the previous municipal boundaries only. The integration must establish consistent coverage and a standard technology platform for the Fire Service throughout the City of Toronto.

 Estimated costs of $21 Million for infrastructure, equipment and support services is included in transition capital costs for the Fire Services. There is also a need to include sufficient funding for engineering, therefore, a further $5 Million is required for additional in-building radio coverage for the cost of radio receiver sites and mobile repeaters, and fire station alerting once the engineering design is determined.

 The Emergency and Protective Services Strategy Team recommended a Peer Review beginning in November, 1997. With a number of radio communications systems initiatives pending, a Peer Review was undertaken to determine the common and specialized requirements of the three Emergency Services. A number of situations have been identified for possible technical integration, cost savings and economies of scale. To date, the Fire Service has not finalized a system design and subsequent level of integration.

 Conclusions:

 It is anticipated that the new Radio Communications System will be in operation within eighteen months from the date of Council approval.

 Contact Name:

 Tom Powell, Deputy Chief - Administration and Communications

397-4306

 (Report dated April 2, 1998, addressed to the

Emergency and Protective Services Committee and the Budget Committee

from the Fire Chief)

  Purpose:

 Introduction of one standard of self contained breathing apparatus across the city to ensure fire fighter safety and allow Fire Services to safely re-assign staff and apparatus as resources are required.

 Funding Sources, Financial Implications and Impact Statement:

 A one-time transitional investment is requested. The estimated costs for the introduction of one standard of apparatus is $2,000,000 for the purchase of 700 breathing apparatus, cylinders, voice amplifiers, face pieces, and associated equipment.

 Recommendations:

 It is recommended that:

 (1)the funding in the amount of $2,000,000 be approved as part of the Transition Funding; and

 (2)the City of Toronto Fire Services proceed to review the different types of self contained breathing apparatus available and select one type for purchase.

 Council Reference/Background/History:

 This project was originally submitted January 8, in the 1998 Fire Services Capital Budget, and then re-submitted February 18, when the Transition Projects were removed from the Capital Budget.

 Currently there are three different types of self contained breathing apparatus in use, M.S.A. 4500 Custom 11, Scott (4.5 & 2.2) and ISI for a total of approximately 850 units.

 Comments and/or Discussion and/or Justification:

 The delay of the selection and implementation of one standard type would be a safety concern. NFPA 1404 (Standard for a Fire Department Self-Contained Breathing Apparatus Program) Section 2.1 Inventory and Allocation requires sufficient self contained breathing apparatus for all members with a reserve supply of air, either in the form of spare cylinders or an on-site filling system. At large scale incidents, when the former departments overlap on their response, or when fire fighters are relocated throughout the city, it will be vital that the fire fighters are fully trained and familiar with the specific breathing apparatus in service. If a situation should arise where the unit malfunctions, it is essential that the fire fighter instantly engages the emergency procedures. With three different types of apparatus in use, fire fighter safety is compromised.

 Also the existing types and styles of breathing apparatus are in various stages of condition and age and many of them must be replaced during 1998.

 Conclusions:

 Three different types and numerous styles of aging breathing apparatus are not conducive to providing effective fire protection services. Therefore, in the interest of fire fighter safety and uninterrupted service at emergency incidents, the City of Toronto should purchase and introduce one standard of self contained breathing apparatus during 1998.

 Contact Names:

 William Stewart

Deputy Chief

497-4304

(Report dated April 6, 1998, addressed to the

Emergency and Protective Services Committee and the Budget Committee

from the Fire Chief)

  Purpose:

 One method of training and one set of training material must be used in order to most effectively facilitate and expedite a safe and consistent amalgamation of the six emergency response departments. Previously the former Departments utilized different training packages.

Management, media relations and conflict resolution sessions should be provided to all senior management, approximately 100 staff.

 Funding Sources, Financial Implications and Impact Statement:

 One-time transitional funding is requested. The estimated costs are $570,000. The purchase of this one time investment would impact the training materials line item, if drawn from the Fire Services Operating Budget.

 Recommendations:

 It is recommended that:

 (1)transitional funding in the amount of $570,000 be approved; and

 (2)the City of Toronto Fire Services proceed to purchase the necessary training materials; and

 (3)the City of Toronto Fire Services proceed to arrange with Human Resources for a facilitator for management, media relations and conflict resolution sessions.

 Council Reference/Background/History:

 This project was originally submitted January 8, in the 1998 Fire Services Capital Budget, and re-submitted February 18, when the Transition Projects were removed from the Capital Budget.

 Comments and/or Discussion and/or Justification:

 The Fire Services are now ready to proceed to order the required training materials to commence the various programs required to ensure the operational effectiveness of staff. This will allow a consistent level of training for the new Service.

 Bulk purchasing will allow for reduced costs. The following training materials will be ordered for distribution to staff:

 IFSTA Essentials of Fire Fighting Training Manual

• 4^th Edition(3,200 copies - $127,440 U.S. funds)

IFSTA Essentials of Fire Fighting Study Guide(3,200 copies - $86,000 U.S. funds)

Total U.S. Funds: $213,440

Total Cdn. Funds: $304,792 ($1.4280 U.S.)

 Ontario Fire Fighter Standards

• 3,200 Learner Guides-$ 71,280
• 3,200 Learner Notes-$ 31,280
• 1,000 Trainer Facilitator Guides-$ 21,768

Total Cdn. Funds$124,328

 The total cost with applicable taxes is $493,488.

 Conclusions:

 It is important for the Toronto Fire Services to have legally defensible, skills-based training to recognized performance standards for recruits, for fire fighters and for officers.

 Without these manuals and guidelines, training procedures and equipment will not be consistent throughout the amalgamated City resulting in inefficient and ineffective provision of service to the public as well as unsafe working conditions for firefighting staff.

 Contact Names:

 Deputy Chief William Stewart

397- 4304

 (Joint report dated April 16, 1998, addressed to the

Corporate Services Committee and Budget Committee from the

Commissioner of Corporate Services and the City Clerk)

 Purpose:

 To seek funding approval for City Clerk=s Department transitional investments required from 1998 to 2000 in order to achieve proposed 1998 and future year operating budget reductions.

 Funding Sources, Financial Implications and Impact Statement:

 The City Clerk=s Department recommended 1998 Operating Budget includes reductions of $3,226,300, conditional upon the approval of the transitional investments outlined in this report. Operational efficiencies and resultant budget savings result in a payback of less than one year in most cases, thereby justifying each investment. The Clerk=s budget has absorbed much of the related operational expenses and, where possible, the investments are phased over three years to ease the financial impact in 1998.

 Recommendations:

 It is recommended that:

1. the City Clerk=s proposals for transitional investments, as outlined in this report, be approved and implemented in 1998;

1. that total funds in the amount of $2,729,000, phased over three years, be approved for the Clerk=s Department requested transitional investments, with funds in the amount of $1,585,000 to be provided in 1998, in accordance with the Chief Financial Officer & Treasurer=s report (April 17, 1998) respecting Transition Projects - Financing Strategy; and

1. that the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

 Background:

 The  Budget Committee, at its meeting on April 3, 1998,  had before  it a report (April 3, 1998) from the Chief Financial Officer and Treasurer, respecting a consolidated listing of the 1998 Transition Project Requests. The Budget Committee deferred consideration of this matter to its meeting on April 20, 1998, and requested Finance staff to further review the transitional project proposals with department staff and report back on the 1998 funding requirements.

     Discussion:

 In respect of the City Clerk=s funding request for transitional investments, the following should be noted:

• all projects are a direct consequence of amalgamation of the seven former municipalities, and would not otherwise have been undertaken;

• the City Clerk=s original requests totalled $3.8 million in 1998 and have been reduced to $2.8 million, phased over 3 years, with a 1998 impact of only $1.6 million. Many of the original requests have been absorbed by the Department, or where possible, removed entirely;

• as the remaining requests would not have been made by any one of the individual former municipalities, no funding provision was previously projected and the current budget cannot further absorb these transition costs;

• each investment clearly reflects either a front line service delivery benefit or results in efficiencies to compensate for staff reductions already included in the proposed 1998 budget. Implementation must occur this year in order to achieve the projected 1998 salary savings.

• the transitional investments outlined in this report have be reviewed and are supported by Finance Department staff.

 Appendix A summarizes the City Clerk=s transition investments required and associated benefits from 1998 to the year 2000.

 Council Member Support Services & Clerk=s Administration

 The requested transitional investments will improve this area=s I.T. service, productivity and response to Council Members and staff. totalling $103,000, phased over three years, produce $179,000 in 1998 budget savings resulting from staff reductions already included in the Council Member Support Services & Clerk=s Administration budget. The payback on investment would be realized in 1998 with an annualized budget savings of $238,000 in each subsequent year. The investment will improve this area=s I.T. service, productivity and response to Council Members and staff.

 Details of the requested transitional investments are as follows:

 Remote Management Software - Required to remotely manage user work stations, reduce I.T. support time and improve user productivity. The investment is therefore essential in order to achieve the proposed 1998 operating budget savings through staff reductions in this area. The current demand for technical services in remote locations is greater than anticipated (ie. Council Members= offices in multiple locations) and this investment would help compensate for the lack of available resources to address such deficiencies.

 Information Technology Staff Training - Staff currently support all system standards of the former municipalities, (ie. 2 office suites, 4 database programs, 3 operating systems, etc). The requested I.T. training is required to deliver quality IT service (Corporate standard) in a timely fashion to Councillors, their staff and Clerk=s staff. Lack of investment would result in productivity loss, impacting on the level of staff resources required to deliver IT services and assistance, and consequently eliminate the 1998 operating budget savings proposed through staff reductions in this area. Funding for this training is not available within corporate training budgets.

 Secretariat

 Transitional investments totalling $673,000, phased over three years, produce $344,000 in 1998 budget savings already included as staff reductions in the Secretariat budget. As a result of functional efficiencies and related budget savings, the payback on investment would be realized in 1999, with an annualized savings of $458,000 in each subsequent year. The investments provide secretariat staff with the necessary tools to improve front line service delivery (ie Council/Committee support and assistance to the general public).

 Details of the requested transitional investments are as follows:

 Legislative Document Publishing Macros - To improve the speed and accuracy of creating legislative documents in the new office suite (MS Word), new macros must be created and distributed to staff. Failure to make this investment would negatively affect productivity and require additional budget provisions to address software conversion issues. This investment is required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Two Legislative Servers for Consolidation of Legislative Documents - A dedicated Clerk=s super-server is required for the Secretariat to work as a cohesive unit. The volume of work, and the integration of processes for the production of documents requires that all staff use the same hardware and software capable of handling the volumes produced. In addition, the acquisition of network server upgrade licences to accommodate the Novel 4.11 operating system for the new City is necessary to maintain software licencing requirements in accordance with copyright laws. These investments are required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Enhancements to Support Public Internet Access - The Internet is considered a powerful business tool and has proven itself as an efficient technology that possesses the ability to disseminate information to both the general public and its corporate client. The Internet will act as another public information access point that relieves secretariat staff from responding personally to inquiries. As a result, the investment contributes to a portion of the 1998 operating budget savings proposed through staff reductions in the Secretariat.

 Critical Hardware Upgrades (Pentium computers = 60, Notebook computers = 8, Network printers = 10) - The information/database demands requires more powerful computers and peripherals to effectively respond. Secretariat services are highly time sensitive and staff require upgraded and standardized equipment to meet the many deadlines. Failure to make this investment would negatively affect productivity and the ability to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Issues Tracking Software - The system will serve as an information management tool for the new Council, staff and public. The program is designed to record requests for reports and proposed actions by staff or ABC's; record notations and comments; finally, the system will retrieve this data under a number of criteria and be accessible to all parties interested in these reports. This investment is required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Municipal Code - Investment in the consolidation of City By-laws organizes the By-laws in a topical format and facilitates access for public and staff research purposes through hard copy and electronic version, providing quick and easy access to required information. Failure to make this investment would require additional staff resources to respond to Code inquiries relating to individual former municipalities or the new amalgamated City. As a result, a portion of the 1998 operating budget savings proposed through staff reductions in this area would not be achieved.

 Elections and Legislative Services

 The Election and Legislative Services function of the City Clerk=s Department projected almost $8,000,000 revenue in its 1998 budget, with expenditures of approximately $7,000,000. The recommended salary budget in this area was based on the anticipated approval of requested transitional investments. The investment would produce functional efficiencies and eliminate exposure to increased budget requirements (i.e. more staff would be required to fulfill legislative responsibilities, customer service would suffer and some legislative requirements would not be met).

 A total of $212,000 in transitional investments are required in 1998 to produce $374,000 in 1998 budget savings already included as staff reductions in the Elections and Legislative Services budget (this does not consider additional staff resources that would be required if the investment is not approved). The pay back on investment would be realized in 1998 with an annualized $431,000 savings in each subsequent year.

 Details of the requested transitional investments are as follows:

 Vital Statistics Support Program (database) - The legislative requirement for a uniform registration system is best addressed through the requested investment, as the manual consolidation of information across the City would be a highly labour intensive and time consuming exercise. Lack of investment would result in the need for additional staff, thereby eliminating the 1998 operating budget savings proposed through staff reductions in this area. The request provides for hardware and material requirements, with internal development of the database and programming expertise provided by corporate I.T. resources.

 Gaming Services Support Program (database) - This investment is required for legislative compliance with Gaming Services legislation through a consolidated, integrated system. Without the system there is no comprehensive, consolidated database to more effectively ensure compliance. The manual tracking and consolidation of this information across the City would be a highly labour intensive and time consuming exercise. The request provides for hardware and material requirements, with internal development of the database and programming expertise provided by corporate I.T. resources. Lack of investment would result in the need for additional staff, thereby eliminating the 1998 operating budget savings proposed through staff reductions in this area. It should also be noted that the Gaming Services program is a significant revenue generator for the City.

 Assessment Customer Service Program (touch-screen system) - The system investment provides full Assessment Roll information at each of the six civic service centres. The cost for a full set of assessment rolls at each of the six civic service centres, coupled with the additional staff requirement to service the public counter is prohibitive. The request provides for hardware and material requirements, with internal development of the database and programming expertise provided by corporate I.T. resources. This investment is required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Design, Reproduction and Distribution Services

 A total of $192,000 in transitional investments are required in 1998. This produces current year budget savings of $521,300, resulting from staff reductions already included in the Design, Reproduction & Distribution Services budget. As a result of the functional efficiencies, the pay back on investment would be easily realized in 1998, with an annualized budget savings of $695,000 in each subsequent year.

 Details of the requested transitional investments are as follows:

 Training for Design/pre-press Applications and Hardware - Required to improve efficiencies through the development of expertise in design and pre-press applications and hardware. This investment produces efficiencies required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area

 File Server to Consolidate Two Outdated Servers - Due to amalgamation, it is anticipated that the increased storage requirement for electronic images and documents will far surpass existing resources. The electronic design files are an increasingly valuable product that the reproduction unit stores for future use. Re-creation of documents to hard copy back-up would negatively impact the records storage budget (staff and storage costs).

 Archiving Unit for Increasing Capacity Requirements - The file storage and archiving system within the design and reproduction unit requires a secure file management environment ensuring corporate data integrity. If a disaster occurred in 1998 the potential recovery costs for the new City Archives, estimated at $822,855 (data recovery), would be paid for by 13 times the value of this 1998 investment in a new archiving unit system.

 Hardware/software & Operating System Standardization - Staff require compatible workstations and software applications in order to achieve productivity gains. This investment is therefore required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Customized Courier Rate Shopping Software & Hardware - Courier rate shopping realized a 43% reduction in courier costs at the former Metro. Similar reductions could be realized if implemented throughout the new City. If utilized across the new City, payback is projected within the first year of use.

 Dismantling, Relocation & Reinstallation of Press Equipment - This investment in consolidating the print shop operation is essential to producing efficiencies required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Relocate Mail Processing Equipment to Central Operation - This investment in consolidating the mail processing operation is essential to producing efficiencies required to achieve a portion of the 1998 operating budget savings proposed through staff reductions in this area.

 Information & Communications:

 The following transitional investments are primarily related to the new and expanded requirements for public access to information, through the Access Toronto call centre. Public information staff must be equipped to deliver professional, consistent and efficient front line service to the residents and visitors of the new City of Toronto. A total of $375,000 in transitional investments are required in 1998. This will produce current year savings of $257,000, resulting from staff reductions already included in the Information & Communications Services budget. The pay back on investment would be realized in 1999 with an annualized savings $343,000 in each subsequent year.

 Details of the requested transitional investments are as follows:

 18 Pentium computers - Access Toronto - There is currently a shortage of Pentium computers available to the public information staff who need to be able to answer to the public and staff . Existing computers are incompatible and do not have the capacity required to host the software and volume of information, nor the speed to meet satisfactory response times.

 City Council=s objective is to provide one window access to uniform information across the city, with staff able to provide answers to a majority of enquiries at first point of contact. Without this investment, customers across the city may receive different, inaccurate or incomplete information, depending on which public information officer they access.

 These computers will enable staff at the centralized call centres and the various civic service centres to perform public information duties more consistently and efficiently - from having access to the City home page (which is not the case currently across the city), to accessing e-mail, directories and program & service descriptions.

 Purchase of Contact Management Database - This investment is essential to providing Aone-window access@ to customers at all locations and at the Access Toronto call centre. The database will provide consistent information across the city, updated immediately and on-line, to reduce dependence on quickly out-dated hard copy of information. Service to the public=s Afirst contact@ with the City will suffer if this investment is deferred for integration into a corporate I.T. approach.

 Purchase of Automated Call Distribution System - This system was to be implemented on January 1, 1998, with transitional funds recommended as a source of funding for the project. It is required so that the call centre is accessible and able to transfer calls to each of the former municipalities, (telephone systems currently are not compatible).

 The current system was initially leased for six months, pending its consideration as a transitional investment or the incorporation of this new cost into the City Clerk=s 1998 Operating Budget. Purchase or lease of this system does not reduce annual expenditures from any former municipality.

 The cost to purchase the system is estimated at $115,000.00. The lease is $64,000 per year ($128,000.00 over two years) and therefore offers a payback in year two.

 Blue Pages Listing - With a December 1997 deadline for submission of the new City of Toronto information, the 1998 Blue Pages have already gone to publication. As an interim measure, general numbers were provided by departments in the former municipalities (specific numbers were avoided because structure, staffing and telephone listings were not yet finalized). Telephone listing formats, guidelines and funding varied in each of the former municipalities.

 The Clerk=s Information Services provided consolidated 1998 information, however, future listings will adhere to a uniform corporate strategy and format, with the annual source of funding to be identified in the 1999 operating budget process.

 City Services Guide - It is recommended that production and distribution of an updated city services guide be deferred until 1999, when organizational structures, staffing and program services become finalized. It is further recommended that this type of publication be produced every three years, following municipal elections.

 Records & Archives Services:

 Transitional investments totalling $769,000, phased over two years, produce $575,000 in 1998 budget savings already included as staff reductions in the Records & Archives budget. The pay back on investment would be realized in 1999 with an annualized savings $767,000 in each subsequent year This request is essential to producing efficiencies required to achieve all of the 1998 operating budget savings proposed through reductions in staff and storage costs in this area.

 Renovate Duncan Mills Records Centre & Archives Consolidation - The seven former municipalities store records in 12 locations. Existing facilities cannot accommodate the records storage needs of the new City. Larger facilities with automated technology and more sophisticated materials storage and handling systems offer economies of scale for storage, retrievals, circulation management and disposal. Renovations to the 160 Duncan Mills site would result in a City managed asset to accommodate the City=s inactive storage requirements, with a short pay back period. See Appendix B for a detailed business case supporting the investment.

 Conclusions:

 It is imperative that the requested funding for transitional investments be approved early in 1998. Each investment returns a very short pay back and in most cases has a favourable impact on front line service delivery. The identified efficiencies compensate for staff reductions already included in the proposed 1998 budget, and consequently, implementation must occur this year in order to achieve the projected 1998 salary savings

 The Department has reduced the funding required in 1998 from the original requests of $3.8 million in 1998 to $2.8 million, phased over 3 years, resulting in a 1998 impact of only $1.6 million. Many of the original requests have been absorbed by the Department, or where possible, removed entirely.

 The Commissioner of Corporate Services, the City Clerk and the Chief Financial Officer & Treasurer concur in the foregoing recommendations.

 Contact Name:

 Barbara McEwan

Interim Lead, Council Services and Administration

392-4373

  (Report dated April 17, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

 Purpose:

 To receive approval for the process and financing strategy for transition projects.

 Funding Sources, Financial Implications and Impact Statement:

 This report discusses the general funding guidelines and framework for transitional projects and the overall impact. The establishment of, and the funding sources for a Transition Project Reserve Fund is proposed. The report estimates a potential for debt requirements, for Transition related projects, of up to $220 million less whatever funding can be found from Transition related sources. Various scenarios are presented that show the impact on future current budgets - ranging from $16.3 to $26.5 million in 1999, additional costs of between $4.5 million to $7.5 million in 2000 and a further additional cost ranging form $5.7 million to $7.6 million in 2001.

 Recommendations:

 That the Budget Committee approve;

 1)the Transition project funding framework proposed in the report,

 2)the establishment of a ATransition Project Reserve Fund@ to be used to fund Transition projects.

 3) that the following revenues be contributed to the new Transition Project Reserve Fund;

* all one-time revenues (unbudgeted or Awindfall@ revenues),

* all revenues from asset/land sales in 1998, 1999 and the year 2000,( not previously committed by Council)

* the residual Provincial loan funds in 1998 (if any),

* additional Provincial Transition support (if any),

* surplus reserve or reserve funds as identified (with Council approval)

 * existing current budget allocations and rate financing (as appropriate)

* Debt financing (for unfinanced reserve fund balance)

 4)that existing current budget allocations be used wherever possible to fund expenditures of an operational nature (training, consulting fees, project management etc) and that existing reserve funds and rate financing be utilized where appropriate.

 5)that a maximum envelope of $250 million (gross) be approved for transitional project spending between 1998 and the year 2000, resulting in a requirement for debenture financing in the range of $150 million to $250 million depending on the City=s success in utilizing existing allocations (rate/current budget/reserves) and in capturing additional funds from the sources identified above.

 6)that Committee receive for information Attachment A1@, the revised preliminary listing of requests for Transition Funding, and direct that all requests for transitional project approvals, in report form, be submitted for approval following the process outlined in this report

Council Reference/Background/History:

 At its meeting of April 3, 1998, the Budget Committee received the 1998 Preliminary Transition Project Requests Report and directed that staff report back to its meeting of April 20,1998, identifying the transition projects proposed, the associated 1998 expenditures, and the source of funding proposed.

 Discussion:

 The transition process will extend over a period of years as the City=s infrastructure, service delivery structure and information and communications technology are restructured to meet the service needs of the new City. At this point staff have not identified all of the transition related projects nor confirmed the actual amounts required for each project as complete project justifications are still being prepared. An initial list was presented to Budget Committee in the previous report. A revised listing is attached as Attachment A1@ to this report. A significant number of revisions have been made to the listing which highlights the preliminary nature of the requests. While the actual total has been reduced (from $246 million to $235 million) an unallocated amount has been added to reflect the expected future requests.

 Additional projects could be identified as service restructuring and the preliminary studies in progress which could increase the total amount of transitional projects and funding required. Alternatively, certain projects could be scaled back or eliminated as further analysis is performed. Significant 1998 and future operating savings and service delivery rationalizations are contingent on these projects.

 The attached list identifies those projects which have been submitted by the Departments. The preliminary Departmental submissions supporting the projects which shows the justification, details the expenditures and summarizes the potential savings are bound separately and are available for review.

 A preliminary review indicates that operational-type expenditures (training, consulting etc)

included in these transitional requests. If funds exist for these types of expenditures - within the proposed 1998 Current Budget - then they should be utilized first. The funding strategy proposed does not impact the 1998 Current Budget.

    Funding Framework

 Specific funding is to be proposed for each project. The funding will, generally, follow the rationale outlined below and be transferred to the >Transition Project Reserve Fund= as applicable.

 Rate Funding:where expenditures directly relate to an activity normally financed through rates ( water, water pollution, parking etc) And,

 where the amount requested will not result in an increase in the rate itself, and,

 where sufficient funds exist in the appropriate rate related reserve fund, and

 where the project will result in demonstrable savings or improvement which will directly benefit future rates, then

 Rate funding is recommended.

 Reserve financing:Where the project relates to expenditures normally financed through reserve or reserve funds and,

 where, in the opinion of the Chief Financial Officer and Treasurer, sufficient funds exist in the reserve fund,

 where a specific payback is available which is suited to internal funding,

 or where surplus Reserve funds have been identified by the Chief Financial Officer and Treasurer, then

 Reserve funding is recommended

 Departmental

Current Budgets:Where the expenditures are of a type which normally would be financed through the normal current budget (consulting, training, furniture, signage etc) or

 where the amount requested is small ($100,000 or less), then

 The Departments be directed to absorb the cost within their approved 1998 Current Budget allocation or to include in future years budgets.

 Special Transition

financing / debt:Expenditures which will result in the acquisition of a long term asset, or

 where no other alternative financing exists

Will be funded through the Transitional fund established for this purpose. Where approved transitional expenditures exceed available funds in the Transition Project Reserve Fund debt financing is recommended.

 The Transition Project Reserve Fund

 The Transition Project Reserve Fund will be funded by the following means - all of which directly reduce the City=s borrowing needs;

 *the residual Provincial Loan available after 1998 Current Budget requirements

 *all proceeds from land sales in 1998 - 2000 (unless the proceeds have been previously committed)

 *all Corporate Aone-time@ revenues in 1998 (not already recognized in the 1998 Budget)

 *Funds from existing reserve funds no longer required for their original purpose which may be identified (subject to Council approval )

 *any additional Provincial funding which may be secured to cover transition costs associated with downloaded responsibilities.

 *existing current budget allocations and rate financing (as appropriate)

 * Debt financing (for unfinanced reserve fund balance)

 The Transition Project Reserve Fund will accumulate funds from these sources and will be used to fund project expenditures as required. When insufficient funds are available in this Fund debt financing will be required.

The use of debt financing is appropriate due to the fact that the use of debt will allow the Corporation to spread the impact of these one-time costs over many years and properly match the benefits (savings) with the costs (debt charges).

 Staff Exit Costs

 Staff Exit Costs have been shown separately. Council has approved the initial use of $10 million from existing Reserve Funds.

 Financial support ($50 million) from the Province has been requested in accordance with Council=s direction. A further report on the amount required for staff exits will be brought forward in September. The total estimate of $90 million is expected to be the upside limit at this time.

  The Process

 All transition projects should be supported by separate reports which will flow as soon as the appropriate information is available. In addition to complete description of the projects and a full justification, the report will detail the expenditures and the identified savings. As well, the reports will specify the timing and the specific source of funding within the approved framework.

 Financial Impact

 At this point the total cost for transition related projects identified to date, excluding the staff exit costs, is estimated at $144.7 million (gross). In addition, an estimated $90 million is shown for staff exit costs. It is also reasonable to expect additional projects to be identified as the transition / amalgamation process proceeds. It is therefore believed that additional projects will be added bringing the total potential expenditures to the $250 million range.

 At this time, potential funding from existing sources (rate/Reserve fund/current budget) of approximately $50 million has been identified over this three year period. In addition it is estimated that over this period the Transition Project Reserve Fund could receive some $50 to $100 million from the sources identified.

Attachment #2 shows the potential net requirements by year and estimates the potential debt charges under three scenarios. The first scenario assumes 100% debt financing will be required. The second assumes $50 million in revenues from existing sources. The third assumes that the City will generate $50 million in new one-time funding over this period.

 Scenario #1 (attachment #2a), shows cumulative debt costs of $0.0 in 1998, $26.5 million in 1999, $36.4 million in 2000, and $37.6 million for 2001 and beyond.

 Scenario #2 (attachment #2b) shows potential cumulative debt charges of $0.0 in 1998, $20.9 million in 1999, $29.9 million in 2000 and $30.0 million beyond that year.

Scenario #3 (attachment #2c), shows potential cumulative debt costs of $0.0 in 1998, $16.3 million in 1999, $22.4 million in 2000, and $22.5 million for 2001 and beyond.

 These estimated debt charges are directly impacted by the our financial strategies and our success in raising new one-time revenues as outlined above.

 Conclusions:

 To capture the savings identified in the 1998 current budget reductions, and to begin the process of restructuring the City=s infrastructure, service delivery structure and information and communications systems, there are transition projects required that must be initiated.

 It is appropriate to fund these one-time transition costs from one-time revenue sources associated with the amalgamation such as land sales, provincial loan funds, and other unexpected or windfall revenues. In the event these are not sufficient, the authority to issue debt for these projects is also requested.

 The issuance of debt is appropriate due to the nature of the costs (one-time restructuring) and due to the use of debt to allow the City to match the benefits of amalgamation (savings) with the costs.

 No review of the requests listed on Appendix A1@ is recommended at this time as all will be the subject of separate reporting.

 Contact Name:

 Ross Cuthbert; 397-4214

   (Supplementary Report dated April 20, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

  Purpose:

 To provide a list of 1998 Transition Projects and to tentatively identify the funding sources and the estimated savings for each.

 Recommendation:

 It is recommended that the Budget Committee review this report in conjunction with the previous report (Agenda item 3e).

 Council Reference:

 Supplemental information requested by Budget Committee.

 Discussion:

 At the direction of Budget Committee the request for Transition Funding list has been revised as follows;

 (a)to show only 1998 project requirements which are ready to proceed;

 (b)to specify funding sources; and

 (c)to identity related savings and 1998 budget reductions already taken (where possible).

 The new listing is attached (Attachment 'A'). It must be noted that, due to the nature of the transitional/amalgamation process itself, additional projects will come forward. As such the process recommended in the original report (Agenda item # 3e) remains a priority.

 The funding framework and strategy outlined in that report also remains a priority. A formalized mechanism for capturing appropriate revenues and utilizing them through the proposed Transition Project Reserve Fund remains a key requirement to track transitional costs and reduce future debt charges.

     The revised listing shows:

1998

$

Program Requests30,848,000

Staff Exit Cost45,000,000

Total Gross Costs75,848,000

 Potential Reserve-Existing Sources(6,356,000)

 Approved use of Reserve Funds (re staff exit)(10,000,000)

(re staff exit)

Total Potential Offset/Reserve(16,356,000)

 Projected Net Requirements59,492,000*(From Transition Project Reserve Fund/Debt)

 *Represents 1998 proposed cashflow only. Cashflows associated with some of these projects may increase the commitment and the associated debt charges.

 Projected Debt Charges:

 Projected debt charges for 1999 would be in the range of $9 million (assuming all projects completed) and the debt issued late in 1998 or early in 1999.

 Conclusions:

 The attached listing shows potential projects as submitted and their potential funding sources and savings. Detailed justification and appropriate cost-benefit information will be contained in individual reports.

 Contact Name:

 Ross Cuthbert, 297-4214

 (Report dated April 20, 1998, addressed to the

Emergency and Protective Services Committee and Budget Committee

from the Fire Chief)

  Purpose:

 Budgetary approval is requested for a consolidated dispatch system as part of transition funding for the Fire Services. The project would include the acquisition, installation, implementation, staff training and ongoing support for a fully-featured centralized computerized Call-Taking/ Dispatch and associated records system.

 This system would fully automate the following activities and functions:

 (1)the taking of telephone calls from the public, either transferred by computer from the 9-1-1 system or dialled direct to the fire services for an emergency response to an incident,

 (2)the display to the Call-taker/Dispatcher of a survey-accurate computerized map of Toronto showing all streets, properties, lot lines, rivers, ravines, rail lines, sewers, hydrants, etc., highlighting on the map the address location from which the telephone call is being made,

 (3)the recommendation of the type and quantity of vehicles to respond and the determination via an automatic vehicle locating system of which vehicles are presently closest to the scene of the incident,

 (4)the automatic dispatching of these vehicles using: (a) computers and printers installed in each station for those vehicles parked in stations at the time of a call, and/or (b) the transmission of call-related information via radio to on-board computers installed in all emergency response vehicles, complete with computer-recommended street routing to the scene of that incident,

 (5)the tracking and recording of all information related to that incident, especially the time taken for vehicles to respond, the time spent on scene, the time when vehicles are available for another call and the time vehicles arrive back at the station,

 (6)the direct transfer of incident-related information via computer to/from the ambulance computer system,

 (7)the management of a personnel database including a duty roster of all staff on duty complete with historical staff training records,

 (8)the completion of a report on the incident at the station by the captain of a vehicle which responded to that incident using an on-line computer networked to fire services headquarters,

 (9)the inspection of premises by Inspectors in the Fire Prevention Division using mobile hand-held computers and the tracking of violations through the court system,

 (10)the complete inventory of stores, clothing, apparatus and equipment for all staff in all divisions,

 (11) the management of equipment and vehicle maintenance,

 (12)the accounting of finance user fees for facilities rentals, nuisance alarms, malicious alarms, equipment rentals, administration fees, fire reports, etc.,

 (13)the management of buildings, properties and their maintenance,

 (14)the provision of an off-premise stand-by backup system so that the emergency Call-Taking and Dispatch functions may continue in the event of the inoperability of the prime site.

 Funding Sources, Financial Implications and Impact Statement:

 Funding has been requested as part of the proposed transition funding.

 Preliminary estimates for the costs of the specified system are as follows:

 Description:Estimated Funding:

Call-Taking/Dispatch Stations$400,000

 Communications Equipment$200,000

 Computer systems at all stations, divisions, offices$1,600,000

 Software$2,300,000

 Other computer and hardware costs (printers and stands, battery$1,200,000

backup units, personal computer workstations, electrical modifications, etc.)

 Project Management/Staff Training $1,400,000

 File Conversion and Creation$750,000

 Ruggedized Mobile Computing Equipment$2,000,000

 Automatic Vehicle Locating systems$600,000

 Fire Prevention=s Pen-based Hand-held Computers$1,200,000

 Weather Monitoring, Wall Projection and Voice Synthesization Systems$450,000

Taxes and Contingencies$2,900,000

 Total Estimated Project Cost$15,000,000

 Recommendations:

 It is recommended that:

 (1)budgetary approval be provided under Transition funding; and

(2)the Fire Chief present a further report to Committee on the process to be used to meet requirements in conjunction with the review of the upgrade to the Communications Systems.

Council Reference/Background/History:

 The merger of the six former Fire Departments into one Fire Services resulted in six different systems for taking calls from the public for emergency services, dispatching vehicles, record keeping and the presentation of statistics. Three of these six systems were partially computerized while the other three were not. None of the present computer systems are in a position of being expanded and re-sized to fulfil the requirements of the Fire Services which requires an advanced and proven centralized Call-Taking and Dispatch system.

 The inclusion of a computerized map in the system specifications allows the Call-Taker/Dispatcher to immediately note the location and municipal address of an incoming telephone call, the street network that makes up the immediate area, the threat to neighbouring properties if a fire call, the recommended routing for responding vehicles, etc.

 The project would include desk-top computers and printers in all stations, divisions and headquarters. In addition, on-board ruggedized computers would be specified for all of the emergency response vehicles including permanently-mounted notebook computers for the District Chiefs, the Platoon Chiefs and the Command Vehicle.

 Inspectors in the Fire Prevention Division would be able to conduct premise inspections using mobile pen-based computers complete with premise inspection history and all Fire Code requirements. Applicable staff in the Administration, Fire Prevention, Training, Communications, Mechanical and Fire Suppression divisions would have on-line access to department-wide information relating to incidents, premise inspections and violations, apparatus, equipment, vehicles, manpower, staff training records, and shift rostering.

 The requirements of the Fire Services also include a wide-area telecommunications network to allow data to be transmitted to/from all stations, divisions and headquarters. This need is being addressed corporately through the Corporate and Human Resources division.

 The Fire Services is presently taking calls from the public for emergency responses and dispatching apparatus and manpower using six different systems. Some of these systems were installed 15 years ago. None of these systems were designed to integrate or interface with the others. Of particular concern is the problems associated with consistently identifying the required resources, ensuring that they are the nearest resources, and dispatching those resources in a timely manner. This is especially true for those three previous fire departments where computers systems were not used to expedite the call taking and dispatch process. Once an incident is over, we have six different systems of capturing incident-related statistics and reporting.

 A centralized advanced proven emergency Call-Taking/Dispatch system is required with standardized record keeping procedures for deployment across all divisions and offices of the fire services. The impact of not approving this request means that the present six disparate, and in some cases antiquated systems must continue to operate thus forgoing opportunities of improving service to the public by standardizing and expediting the call-taking and dispatch process.

 Contact Name:

 Tom Powell: 397-4306

Norm Gibbons: 397-4315