Approval of Funding for Real Estate Consulting Firm

 The Corporate Services Committee recommends the adoption of the following report (June 19, 1998) from the Commissioner of Corporate Services:

 Purpose:

 To request Council authority for expenditures on real estate services provided by Johnston Donald Associates to complete approved contracts for the Sheppard Subway that are currently under way.

 Financial Implications:

 Funding for the contracts is included in the capital budget of the Toronto Transit Commission (TTC); a portion of the cost will be recovered through Provincial transit subsidies.

 Recommendations:

 It is recommended that:

 (1)Council approve expenditures in the amount of $75,000.00 for the completion by Johnston Donald and Associates of approved contracts respecting the Sheppard Subway; and

 (2)the appropriate City officials be authorized to take the necessary action to give effect thereto.

 Background:

 At its meeting on April 28 and May 1, 1998, City Council approved the retention of Johnston Donald and Associates for the provision of real estate services for various projects.

 Existing contracts with Johnston Donald were to be continued until June 30, 1998, except for work relating to the Sheppard Subway, which was to be continued until such time as the contracts currently under way are completed. No new files were to be given to Johnston Donald and no funds in excess of amounts included in the report were to be expended without the approval of City Council.

 Council also requested that issues related to the contract with Johnston Donald and Associates be referred to the Chief Administrative Officer, in consultation with the Solicitor, for a report back to the Corporate Services Committee. The Solicitor is preparing a report outlining the process under which the original contract with Johnston Donald was negotiated.

 Discussion:

 The estimated amounts for completion of existing contracts were set out in the report requesting Council approval of the retention of Johnston Donald, based on projections available at the time. For non-Sheppard Subway matters, the amount was $30,000.00. These contracts will be completed within this budget ceiling by June 30, 1998.

The amount for the Sheppard Subway work, as requested by the TTC was estimated in the report to be $85,000.00. On June 9, 1998, the TTC advised that approval for an additional $75,000.00 is required in order for existing contracts to be completed, in accordance with Council's approval. Of this amount, $33,500.00 is for negotiations relating to existing property files, $16,000.00 is for support of existing agreements under Section 30 of the Expropriation Act and a further $16,000.00 is for the completion of agreements for properties previously negotiated by Johnston Donald but not yet requisitioned. A sum of $9,500.00 is included as a contingency against these estimates. The TTC estimates that the work required for the 67 properties involved will be completed by June 1999.

 As City real estate staff are facing a substantial workload at this time to undertake and manage major property disposal projects and rationalization of leased space, external services are required to conduct work for the Sheppard Subway project. The funding for the required work is already provided in the TTC budget. The TTC has strongly requested that the services of the firm of Johnston Donald be continued, as they are satisfied with the work done to date, the firm is already knowledgeable about the negotiations regarding these properties, and the use of this firm is the most cost effective and efficient way to provide the needed services.

 Approval is therefore now sought for expenditure of these additional funds, which are available within the capital budget of the TTC and are in part recoverable through Provincial transit subsidies. As noted above, these funds are anticipated to cover all the additional real estate work related to the Sheppard Subway construction. Approval of the additional funds is urgently required to meet the scheduling demands of the construction.

 Contact:

 Cathie Macdonald: Interim Lead, Facilities and Real Estate: Phone: 392-0449, Fax 392-0029

 The Corporate Services Committee submits the following communication (June 19, 1998) from the Chief General Manager, Toronto Transit Commission:

 This letter is to indicate our strong support for the extension of Johnston Donald and Associates' contract for the acquisition of Sheppard Subway property as outlined in the report from the Commissioner of Corporate Services to its meeting of June 19, 1998. To date, Johnston Donald have been instrumental in the acquisition of over 50 properties on budget and on schedule. We are supportive of their continued work on the project as the most cost-effective and efficient way to conclude "the approved contracts".

 It should be emphasized that there are also some 21 properties that need to be requisitioned by TTC and obtained by City Real Estate staff. Some of these are schedule-critical and we will require a plan, estimate and schedule from the City how this will be undertaken. If City Real Estate staff, due to workload, cannot acquire these 21 properties, outside consultant resources will be required. The TTC estimates that an additional $60,000.00 worth of consultant work is involved. The decision how to best obtain these additional 21 properties on schedule and on budget rests with the Commissioner of Corporate Services.

 Our Mr. A. G. Bertolo, Chief Project Manager - Sheppard Subway, will be present to address any questions.

 (A copy of the communication (June 9, 1998) from Mr. J. A. Sepulis, General Manager, Engineering and Construction, Toronto Transit Commission, forwarding an estimate of the work that needs to be performed by Johnston Donald beyond June 30, 1998, which was attached to the foregoing report from the Commissioner of Corporate Services, is on file in the office of the City Clerk.)