Process to Develop an Agreement on Matters of Mutual Interest

Between the City of Toronto and the Greater Airports Authority

to Lester B. Pearson International Airport

 The Strategic Policies and Priorities Committee recommends the adoption of the following joint report (March 27, 1998) from the Commissioner of Urban Planning and Development and the Chief Administrative Officer, subject to adding a Recommendation (4) as follows:

 A(4)the working group obtain public input and hold public meetings.@

 The Strategic Policies and Priorities Committee submits the following joint report (March 27, 1998) from the Commissioner of Urban Planning and Development Services and the Chief Administrative Officer:

 Purpose:

 Seek Council=s endorsement to negotiate with the Greater Toronto Airports Authority (GTAA) on an accord on matters of mutual interest with respect to Lester B. Pearson International Airport (LBPIA).

 Funding Sources, Financial Implications and Impact Statement:

 There are no immediate financial impacts, other than staff resources required to support negotiation process.

 Recommendations:

 It is recommended that:

 (1)the City of Toronto endorse, in principle, the establishment of an accord on matters of mutual interest with the GTAA with respect to LBPIA;

 (2)the Chief Administrative Officer to lead the City=s participation to negotiate a draft accord to be recommended to Council, and staff be authorized to participate in a working group to identify, negotiate and resolve issues on matters of mutual interest to both parties; and

 (3)the appropriate City staff be authorized to take the necessary action to give effect thereto.

 Council Reference/Background/History:

 On March 23, 1998, one of the City of Toronto=s representatives on the Board of the GTAA, Mr. Gerry Meinzer, appeared before the Urban Environment and Development Committee updating the Committee and Council on LBPIA.

 On March 4, 1998 the Striking Committee recommended the following appointments: to the GTAA Noise Management Committee, Councillors LiPreti and Sinclair, and to the GTAA Consultative Committee, Councillors Brown, Holyday and Sinclair.

 The attached appendix provides an overview of the GTAA and LBPIA.

 Comments and/or Discussion and/or Justification:

 (a)Rationale:

 The Ground Lease between the GTAA and the Government of Canada provides that the GTAA and the City of Toronto shall enter into good faith discussions with a view towards concluding an agreement which addresses matters of mutual interest concerning the development of LBPIA.

 Such an accord has been struck between the GTAA and the City of Brampton (August 1997) and discussions are underway between the City of Mississauga and the GTAA on this subject.

 Prior to amalgamation, the City of Etobicoke was approached by the GTAA on this matter. It was not dealt with by Council or the City Manager pending amalgamation.

 (b)Intent:

 The intent of structuring an accord is to clarify the relationships, structures, responsibilities and authorities, financial obligations and planning processes that will guide the development of LBPIA over the medium term (4-5 years). It will also outline a mechanism by which disputes will be resolved between the two parties if such should arise.

 (c)Proposed Process:

 Given the scope of the issues to be covered in an accord, it is recommended that a staff working group be structured to assist in meeting with representatives of the GTAA, defining the issues, undertaking necessary due diligence and making recommendations to the CAO as part of the negotiation process.

 Staff for this working group would be drawn from Economic Development, Urban Planning and Development Services, Transportation, Emergency and Protective Services, Finance, Legal, and the Offices of the Mayor and the Chief Administrators Office. The process would also seek the input from the Etobicoke Community Council and City Councillors on both the GTAA Community Consultative Committee and the GTAA Noise Management Committee. The composition of the staff team will be confirmed by the CAO.

 The Accord will be approved through Strategic Policies and Priorities Committee to Council prior to being executed and progress reports will be provided to Council as necessary. If through the process being recommended, it is determined that the structuring of an accord with the GTAA would not be in the best interests of the City, or should issues arise which cannot be resolved within a reasonable time frame, Council may elect not to execute an accord with the GTAA or may elect to structure an agreement which is broad in scope.

 (d)Timing:

 While the time frame for the negotiation of an accord was deemed to be May 2, 1998 per the Ground Lease, an extension of 120 days has been agreed to by the GTAA with an option to extend this term if such is found to be required.

 Conclusions:

 Lester B. Pearson International Airport is a strategic component of the urban and economic structure in Toronto and the whole of Southern Ontario. It provides significant economic benefits, both in terms of employment and in its role as the principal international air gateway for Canada. Through the process of structuring an accord between the city and the GTAA, it is hoped that we will be in a better position to jointly maximize the potential of the airport for the benefit of the Toronto region.

 The structuring of an accord between the City of Toronto and the GTAA will serve to create a higher level of understanding between both parties and will clarify the relationships, structures, responsibilities and authorities, financial obligations and planning processes that will guide the development of LBPIA over the medium term (4-5 years), a very critical time given the airport expansion plans which are now underway.

 If, through the proposed process, it is determined that the structuring of an accord with the GTAA would not be in the best interests of the City, or should issues arise which cannot be resolved within a reasonable time frame, Council may elect not to execute an accord with the GTAA.

 Contact Name:

 Christine Raissis, Economic Development, 392-3385.

Anna Pace, Urban Planning and Development Services, 392-8117.

 Appendix 1

 Background on the GTAA/Pearson International Airport

 (1)Structure of the GTAA:

 The Greater Toronto Airports Authority (GTAA) was established in March 1993 as a community initiative led by the Regional Municipalities with the local Boards of Trade and Chambers of Commerce throughout the GTA. Under Canada=s National Airports Policy, the GTAA was reconstituted in accordance with Canadian Airport Authority guidelines and recognized by the Minister of Transport in November 1994 as the CAA for the transfer of Lester B. Pearson International Airport (LBPIA).

 The GTAA is a private, non-profit corporation with a mandate to manage and operate LBPIA within a regional system of airports to enhance regional economic growth and development. The GTAA assumed the management, operation and maintenance of Lester B. Pearson International Airport (LBPIA) on December 2, 1996.

 The GTAA is governed by a fifteen member Board of Directors comprised of nominees from the City of Toronto, four regional municipalities, the Province of Ontario and the Federal Government. According to the by-laws of the GTAA, the City of Toronto appoints three (3) directors to the Board, each for a three-year term. One of these representatives is a nominee of the Board of Trade of Metropolitan Toronto (Mr. Gerry Meinzer), one is a nominee of Council (Dr. Robert Bandeen) and the third nominee represents the interests of labour (Ms. Sharon Moss). The latter two positions are up for renomination on May 12, 1998.

 (2)Background on the Transfer of LBPIA to the GTAA:

 The transfer of LBPIA is effected by a Ground Lease which governs the relationship between the GTAA, as tenant, and Transport Canada, as landlord for a period of sixty years, subject to one renewal term of 20 years. The Ground Lease determines the rent to be paid, the scope of authority of the GTAA in managing the operation of the airport and allocates the risks and responsibilities between the GTAA and the Federal Government for all matters covering the operation of LBPIA.

 The GTAA leases the lands, buildings and fixtures which comprise LBPIA from Transport Canada and assumes all existing leases, licenses, contracts and other agreements between Transport Canada and companies operating at LBPIA which were in existence prior to the transfer.

 The GTAA has the right to determine and collect landing fees from airlines, rent space to concessionaires and other commercial operators, issue permits to taxi and limousine operators, construct and develop the infrastructure of LBPIA and pledge its leasehold interest in LBPIA as security for loans to do so. In return for the right to manage LBPIA and to collect revenues, the GTAA pays a monthly rent to the Federal Government.

 The GTAA offered employment to all Transport Canada employees at LBPIA on the same terms and conditions they had with Transport Canada. Ninety four percent, or 504 of 534 eligible employees, transferred to the new organization. The GTAA has assumed the obligations of Transport Canada and will honour and be bound by all existing collective agreements governing the unionized employees at LBPIA.

 (3)Airport Development:

 The Airports existing terminal facilities have a handling capacity of approximately 28 million annual passengers. It is estimated that this annual practical capacity threshold will be met in the 2000-2004 time frame. Today, capacity is exceeded in the peak hour and peak season periods at Terminals 1 and 2.

 In order to provide sufficient airside, terminal and groundside capacity in the future and to enhance the Airports competitive position as a gateway airport to North America, the GTAA has initiated an Airport Development Program, the phasing of each component to be determined on the basis of demand.

 Funding for the Airport is expected to be provided principally through the issuance of debt securities. The GTAA=s initial public offering of revenue bonds, which generated $947 million, will be used to pay down debt related to the GTAA=s acquisition of Terminal 3 and to begin the development program.

 Airside Development:

 A new north/south runway and first stage of the dual taxiway project was completed in 1997. The north/south runway will increase efficiency during times when strong crosswinds force aircraft away from the higher capacity east/west runways.

 Phase II of the plan calls for the construction of a new east-west parallel runway on the south side of the Airport lands. Site preparation will begin this year with construction to begin in 1999. Longer term plans, after 2010, propose a new east-west runway on the north side of the Airport lands.

 Now in the design phase, the GTAA=s Infield development Project will see the freight and cargo area, presently situated between Terminals 1 and 3, relocated into the infield.

 Terminal Development:

 The primary objective of the Terminal Development Project is to replace the capacity-constrained and outdated Terminals 1 and 2 with a single terminal building. The new terminal will be constructed on the site where Terminals 1 and 2 are currently located. The new terminal will include a three-level roadway system and a new multi-level public parking garage. The design will preserve rights of way for future mass transit access to the Airport. Stage 1 of the development.

 (4)Transportation/Access:

 Transit Improvements:

 Improving existing transit services to the airport and protecting for a future rapid transit connection will be critical steps to meeting the groundside travel demands of projected increases in airport use.

 The Ministry of Transportation in consultation with Metro Toronto, Peel, Etobicoke, Mississauga and the GTAA has identified a transit corridor that would allow the construction of a transit link between the Georgetown GO transit line to the new terminal at LBPIA. The protection of this corridor will be pursued through amendments to the Official Plans of affected municipalities. The terminal redevelopment plans for Pearson should also include rapid transit corridor protection within the airport which is compatible with the corridor identified by the provincial study. The estimated cost to construct the connection is between Pearson Airport and the Georgetown GO line is between $27 and 30 million depending on the technology used. Construction of the rapid transit connection is dependent on the upgrading of the Georgetown corridor to accommodate all-day GO rail service which was estimated at $135 million. No funding is committed for either proposal.

 Road Access:

 The new terminal design requires that highway access for air passengers will be via Hwy. 409. The GTAA and the Province have determined that the new terminal will require new ramp connections between Highway 409 and Highway 427. In the west, a new interchange with Hwy 401 will serve the new infield cargo terminal. The cost of these works is estimated at over $60 million but there are no funding commitments. These modifications to the highway system will significantly improve road based access to the airport and complement the terminal redevelopment plans.

 (5)Noise Management:

 Aircraft operations from LBPIA affect an area which extends beyond the actual geographic boundary of the airport. The GTAA has a Noise Management Policy which outlines its approach to liaising with area residents, managing noise from airport operations, and protecting the airport from incompatible uses, such as residential development, in areas of high noise exposure. The GTAA has two standing committees, a Community Consultative Committee and a Noise Management Committee, the latter which is a vehicle for the community to have input on noise concerns directly to the GTAA.

 The noise management policy states that the GTAA will oppose residential development in areas above the 30 NEF noise contour to protect current and future airport operations from incompatible uses. In May 1996 the Federal Government revised its policy regarding residential uses near airports to recommend that residential development not be permitted in areas above 30 NE. In February 1997 the Ontario government adopted a policy to prohibit residential development within the 30 NEF to protect major airports from incompatible development. However, municipalities are not compelled to implement the provincial policy and still have the discretion to approve residential development in areas above 30 NEF.

 The Meadowvale area of Mississauga has large amounts of land in areas above 30 NEF designated, but not yet built, for residential uses. The GTAA has opposed further approvals for zoning and plans of subdivision on these lands. Applications to redesignate additional industrial land for residential uses in areas above 30 NEF have been filed and are being considered by the City of Mississauga. Within the City of Toronto there has not been significant development interest in redesignation of industrial lands for residential uses in areas above 30 NEF, however prior to amalgamation, Metro Planning had been directed to prepare an official plan amendment to implement the Provincial policy.

 (6)Community Consultation:

 The GTAA provides for community consultation though two committees: The Community Consultative Committee (CCC) is the primary vehicle for regular community input and participation in the activities of LBPIA. It meets every second month with the President and CEO of the GTAA as chair of the committee. The Noise Management Committee (NMC) meets bi-monthly, alternating with the CCC. This committee focuses on the management and communication of any noise issues and, as with the CCC, is open to the media and public and offers an opportunity for public deputations.

 (7)Traffic Statistics:

 Approximately 26 million passengers passed through Pearson Airport in 1997. This represents a 7.8 percent increase over the year previous. This increase was a result of a 13.6 percent increase in transborder traffic, a 5.6 percent increase in domestic traffic and a 3.5 percent increase in international traffic.

 (8)Economic Impact:

 Using the model developed in a Marketing and Economic Impact Study undertaken for LBPIA in 1995, it is estimated that in 1997 the airport generated $11.5 B billion in business revenue; generated 111,995 jobs and $3.2 billion in wages.

 (Communication dated April 6, 1998, addressed to the Strategic Policies

and Priorities Committee from Ms. Sylvia Giovanella, President,

Etobicoke Federation of Ratepayers= and Residents= Associations (E.F.R.R.A.)

 Upon reading the above document, as President of EFRRA, I am concerned negotiations with the GTAA are being entered with little opportunity for input from community organizations. We recognize the importance of Pearson Airport to the economy of Toronto and its neighbouring communities. However, the environment and the health of residents of the western and northern communities within Toronto will be deeply impacted by planned operations and development at Pearson Airport on a daily basis.

 In the letter from Mr. Garrett under the heading of >Timing= is a statement to the effect negotiations with the GTAA were to be completed by May 2, 1998. We favour extending the deadline by at least 120 days to give the Committee an opportunity to obtain a balanced and reasoned position prior to entering negotiations. It is essential that the Committee not allow itself to be pressured into a premature agreement by an artificial deadline declared by the Board of Directors of the GTAA.

 To aid the Committee in arriving at a balanced position, copies of the following documents have been included:

 (a)The EFRRA presentation to the Miller Commission outlining our concerns and issues;

(b)An EFRRA grant request to the Grants Committee requesting funds for airport noise monitoring;

 (Both items (a) & (b) have been unanimously endorsed by the EFRRA Council at a meeting on April 1, 1998).

 (c)The High Intensity Runway Operations (HIRO) document as an example of the GTAA implementing an initiative that is contrary to the noise mitigation procedures used by Transport Canada;

(d)An agreement between Transport Canada and the GTAA for allowing the expansion of night time operations and testing of residents= noise tolerance;

(e)A letter from an EFRRA association member to Minister Collenette explaining flaws and the negative impact of such an agreement on residents.

 It is the intention of EFRRA to make representations to the following Committees:

 Urban Environment & Development;

The Miller Commission;

The Etobicoke Local Council;

And any other committees and municipal organizations as seen as affecting these issues.

 EFRRA is an umbrella organization for ratepayer and resident associations from across the district of Etobicoke within the City of Toronto.

 (Documents referred to above, submitted by Ms. Sylvia Giovanella, have been forwarded to all Members of Council under separate cover on April 8, 1998, and copies thereof are on file in the office of the City Clerk).