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City of Toronto


REPORT No. 6

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on April 28, 1998,

submitted by Mayor Mel Lastman , Chair)


As Considered by

The Council of the City of Toronto

at its Special Meeting

on April 29 and 30, 1998


(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently.

The amendments to these Clauses and to the 1998 Operating and Capital Budgets as a whole, have been consolidated and appear at the beginning of this Report. All supplemental reports and communications considered with these Clauses, together with all additions thereto, have also been consolidated and appear at the end of this Report.)


(City Council, at its Special Meeting on April 29 and 30, 1998, adopted the recommendations of the Budget Committee embodied in the following Clauses:

Clause No. 1 Proposed Capital Financing Management Plan and Other Capital Funding Issues;

Clause No. 2 1998 Operating and Capital Budget for the Water and Water Pollution Control Programs and Harmonization of Water and Sewer Rates;

Clause No. 3 1998 Preliminary Transition Project Requests;

Clause No. 4 1998 Operating Budget - Community and Neighbourhood Services - Funding Cost of Filling 2,000 Licensed Child Care Spaces;

Clause No. 5 Leaf Pick Up Program in Ward 16;

Clause No. 6 Reconstruction of York Mills Road Between Hedgewood Road and York Ridge Road;

Clause No. 7 Mayor's Youth Employment Summit;

Clause No. 8 Child Nutrition Programs: Partnerships in Funding;

Clause No. 9 Toronto Transit Commission Five-Year Capital Subsidy Agreement - Prepayment of Subsidy in Exchange for Release;

Clause No. 10 Provincial Downloading - Updated Estimates;

Clause No. 11 Previously Approved but Unstarted Capital Projects Further Report;

Clause No. 12 Establishment of City Reserves and Reserve Funds;

Clause No. 13 Association of Municipalities of Ontario - Payment of 1998 Membership Fee;

Clause No. 14 Summary of Deputations on 1998 Capital and Operating Budgets;

Clause No. 15 Workers' Compensation - Transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2;

Clause No. 16 Tax Options - 1998-2000;

Clause No. 17 Adjustments to 1997 Surplus and Offsetting 1998 Budget Adjustments;

Clause No. 18 Non-Union Compensation Program, Development and Implementation;

Clause No. 19 Amalgamation and Restructuring 1998 Funding Requirements;

Clause No. 20 Financial Support to the Caribbean Cultural Committee and Caribana;

Clause No. 21 1998 Capital Program Parks and Recreation - Supplementary Arrangements - Woodbine Park Construction (East Toronto);

Clause No. 22 1998 Operating and Capital Budgets and 1997 Sinking Fund Surplus and Annual Sinking Fund Levies for 1998;

Clause No. 23 Recommended 1998 Capital Budget and Financing Authorities;

Clause No. 24 1998 Capital Budget and Financing Authorizations; and

Clause No. 25 1998 Operating Budget;

and received, as information, Clause No. 26, headed "Other Items Considered by the Committee",

subject to the following amendments:

1998 OPERATING BUDGET

Directly Controlled Programs:

Children's Services (No. 3):

(1) by adding thereto the following:

"It is further recommended that the report dated April 28, 1998, from the Committee Administrator, Committee on the Status of Women, entitled 'Pressures Facing Subsidized Child Care Programs', be referred to the Commissioner of Community and Neighbourhood Services."

Hostels, Income and Skills Support, Community Development and Support

Program, Social Services and Housing Administration (Nos. 7, 9, 10 and 11):

(2) by adjusting the gross expenditures and revenues of the following programs within the Community and Neighbourhood Services Department as indicated in the three items below. These technical adjustments have no net impact on the total budget.

Gross Revenues Net

$000s $000s $000s

Children's Services (8,500.0) (8,500.0) 0.0

Hostels 0.0 (3,100.0) 3,100.0

Income Skills and Support 0.0 3,100.0 (3,100.0)

(To correctly reflect the Provincial downloading estimates.)

Social Services and Housing Administration 934.0 434.0 500.0

Community Development and Support (934.0) (434.0) (500.0)

(To correctly reflect the transfer of the Community Development Unit to the Social Services and Housing Administration Program.)

Children's Services 1,132.3 0.0 1,132.3

Consolidated Grants

Community Services Grants (228.0) 0.0 (228.0)

Miscellaneous Toronto (904.3) 0.0 (904.3)

(1,132.3) 0.0 (1,132.3)

(To transfer purchase of services funding from the Consolidated Grants program to the Children's Services Division.)

(3) by adding thereto the following:

"It is further recommended that the name of the Social Services and Housing Administration Program be changed to Social Development and Administration Program in order to more properly reflect the functions of the Program."

Parks and Recreation Program (No. 12):

(4) by adding thereto the following:

"It is further recommended that the communication dated April 14, 1998, from the Director, Community and Tenant Services, regarding Metropolitan Toronto Housing Authority's support for adequate funding for a range of programs affecting children, be received."

Transportation Program (No. 14):

(5) by referring Expenditure Reduction Categories Nos. 30 and 31, headed "Road & Sidewalk Occupancy Permits" and "Permit Enforcement", respectively, to the Commissioner of Works and Emergency Services, with a request that he submit a report to the Budget Committee on additional methods of fulfilling the commitment to the Operating Budget while maintaining the staff complement in these areas.

Special Purpose Bodies:

Licensing Commission (No. 20):

(6) by adding thereto the following:

"It is further recommended that the following motion be referred to the Budget Committee for further consideration and report thereon to the meeting of City Council to be held on May 13, 1998:

Moved by Councillor Moscoe:

'That an amount of $200,000.00 be added to the 1998 Operating Budget for the Toronto Licensing Commission to cover incremental legal costs resulting from the restructuring and the establishment of the Toronto Licensing Tribunal, such costs to be raised in future years through cost recovery from licensing fees.' "

Police (No. 21):

(7) any request that the Toronto Police Service not charge for pay duty for Special Events being referred back to the Budget Committee for further consideration.

(8) by adding thereto the following:

"It is further recommended that:

(1) the target policing project be considered in the existing 1998 Operating Budget envelope for the Toronto Police Service, and the Toronto Police Services Board be requested to submit a report to the Emergency and Protective Services Committee, at the end of July, 1998, on the status of this portion of the budget;

(2) a special committee be established to consider the issue of pay-duty policing;

(3) the membership of the special committee shall include Councillor Gardner, (Chairman of the Police Services Board), Councillor Sgro, (Vice-Chair of the Toronto Police Services Board), Councillor Korwin-Kuczynski, Councillor Nunziata, Councillor Rae and any other interested Members of Council;

(4) the special committee shall report to the Emergency and Protective Services Committee;

(5) the Toronto Police Services Board be requested to submit reports to Council, through the Budget Committee, on the following:

(a) the number of Police Officers and civilians (FTEs) in each year since 1992;

(b) the cost to municipal taxpayers of providing police services to the Provincial Government programs and facilities in the City of Toronto, including the courts and the Queen's Park Government Complex; and

(c) a detailed report on the pay-duty programs, including a list of community events served in 1996 and 1997 and, if possible, a list of those events or groups which could not afford to pay for pay-duty services in those two years; and

(6) the following communications be received:

(a) (April 6, 1998) from the City Clerk forwarding the Toronto Community Council's recommendation that the Toronto Police Service not charge non-profit organizations for criminal records checks;

(b) (April 24, 1998) from the Chairman, Toronto Police Services Board, entitled 'Response to City of Toronto Budget Committee Recommendations - Meeting of March 30, 1998'; and

(c) (April 24, 1998) from the Chairman, Toronto Police Services Board, entitled 'Authority of the Toronto Police Services Board, Toronto City Council and the Chief of Police regarding Police Budgets'; and

(7) the following motion be referred to the Toronto Police Services Board for report thereon to the Budget Committee:

Moved by Councillor Brown:

'It is further recommended that the Budget Chair be requested to include in future budget deliberations, the possibility of offering rookie members of the Toronto Police Service at a nominal rate at the City's subsidized housing projects, in an effort to encourage our officers to truly be a part of our community and to increase the visibility of officers both on- and off-duty.' "

Toronto Zoo (No. 24):

(9) by adding thereto the following:

"It is further recommended that the communication dated April 24, 1998, from the General Manager, Toronto Zoo, regarding the 1998 Operating Budget for the Toronto Zoo, be received."

Support Services:

Clerk's Program (No. 27):

(10) by adding thereto the following:

"It is further recommended that the City Clerk be requested to review the staffing requirements for City Clerk's and report thereon to the Budget Committee."

Other:

Non-Program Net Expenditures:

(11) the fee payable to the Association of Municipalities of Ontario (AMO) for the City of Toronto's 1998 membership being increased from $68,532.33 to $99,604.67.

(12) the City of Toronto's contribution to the Federation of Canadian Municipalities (FCM) Telecommunications Defence Fund being increased from one cent per capita ($22,000.00) to three cents per capita ($66,000.00).

(13) by adding thereto the following:

"It is further recommended that the following motion be referred to the Assessment and Tax Policy Task Force:

Moved by: Councillor Augimeri

Seconded by: Councillor Silva

"WHEREAS the City of Toronto is mandated by the Province of Ontario to provide tax relief for the impacts of Current Value Assessment (CVA). This relief, in the form of a lien, is not relief; and

WHEREAS senior citizens and people with disabilities do not want tax deferrals. Deferrals are liens and as most people consider their homes a heritage for the future and for their children they do not want to have a lien on that future; and

WHEREAS City Council will not be dealing with the issue of the low income senior and low income disabled tax relief program until June; and

WHEREAS City Council will be faced with a choice of a tax deferral or tax cancellation program for low income seniors and low income disabled taxpayers; and

WHEREAS a tax cancellation program would cost from $6-10 million if CVA is implemented immediately; and

WHEREAS funds for a low income seniors and low income disabled tax cancellation program are not in the budget;

NOW THEREFORE BE IT RESOLVED THAT City Council increase the 'tax write-offs' budget in 'Non Program Expenditures' by $8 million."

Corporate Grants:

(14) by adding thereto the following:

"It is further recommended that:

(1) Council recognize the difficulty facing the Municipal Grants Review Committee as a result of the lateness of the Budget this year and, therefore, provide up to $200,000.00 this year only to assist in satisfying those requests made to the Committee; and

(2) the following motions be referred to the Municipal Grants Review Committee for consideration:

Moved by Councillor Nunziata:

'It is further recommended that the Municipal Grants Review Committee be requested to recognize the special circumstances surrounding the needs of the Weston Minor Hockey League and increase the grant from $15,000.00 to $25,000.00.'

Moved by Councillor Balkissoon:

'That the foregoing motion by Councillor Nunziata be referred to the Commissioner of Economic Development with a request that he work with the Weston Minor Hockey League and the Board of Management of the relevant Arena.'

Moved by Councillor Giansante:

'It is further recommended that the request from Etobicoke Federation of Residents' & Ratepayers' Associations (EFRRA) in the amount of $15,000.00 be referred to the Municipal Grants Review Committee for consideration.'

Moved by Councillor Pantalone:

'It is recommended that an additional $20,000.00 be allocated, for consideration by the Municipal Grants Review Committee, as the annual grant to the Alliance of Portuguese Clubs and Associations of Ontario for its yearly Portugal Week Festival to be held in Toronto during the week of June 6 to 14, 1998.'; and

(3) the report dated April 22, 1998, from the Interim Secretary, Audit Committee, entitled 'Management Letter - Metropolitan Toronto Convention and Visitors Association for the year ended December 31, 1998', wherein the Interim Secretary advises that the Audit Committee directed that a copy of the aforementioned Management Letter be forwarded to Council for consideration in conjunction with the grant to the Metropolitan Toronto Convention and Visitors Association (Tourism Toronto), be received."





Capital and Corporate Financing:

(15) by adding thereto the following:

"It is further recommended that:

(1) as certain Toronto Harbour Commissioners' corporate expenses are not essential to support Toronto Harbour Commission operations, the City indicate that it will not cover any deficit resulting from:

(a) first class travel by Commissioners;

(b) travel by Commissioners' spouses; and

(c) costs associated with future development plans related to the new Port Authority unless specifically authorized by Council;

(2) the Chief Financial Officer and Treasurer be requested to submit a report to the Urban Environment and Development Committee on the reductions to the Toronto Harbour Commissioners' Operating and Capital Budgets which might result from the aforementioned policy; and

(3) the following motion be referred to the Chief Administrative Officer for report thereon to the Corporate Services Committee:

Moved by Councillor Layton:

'It is further recommended that the City Solicitor and the Chief Financial Officer and Treasurer be requested to submit a joint report to the Urban Environment and Development Committee on the legal and financial obligations of the City with respect to the Toronto Harbour Commissioners, pursuant to the subsidy agreement dated November 28, 1994, between the Toronto Harbour Commission and the Corporation of the City of Toronto.' "

Non-Mill Rate Operations:

Water:

(16) by adding thereto the following:

"It is further recommended that the Budget Committee review the Downspout Disconnect Program to ensure that the stated 4,000-household objective is achieved; and to report back on any internal program budget adjustments which may be necessary."



1998 CAPITAL BUDGET

Gross Budget Costs:

Parks and Recreation Program:

(1) by striking out and referring the following Items to the Budget Committee for further consideration as part of the 1998 Capital Program:

(a) Item No. 606, North York - New Lit Sports Pad - Grandravine CC; and

(b) Item No. 643, Park Restoration and Naturalization - Vyner Greenbelt Phase 2.

(2) by adding thereto the following:

"It is further recommended that the following motions be referred to the Budget Committee for consideration:

Moved by Councillor Adams:

'It is recommended that the request for an additional $100,000.00 for Don Valley Brick Works (Item No. 45) be referred to the Budget Committee for further consideration.'

Moved by Councillor Davis:

'It is recommended that $150,000.00 for the Phil White Arena - Lobby (Item No. 906) be added back to the Parks and Recreation Program 1998 Capital Budget.'

Moved by Councillor Jones:

'It is recommended that $100,000.00 for the Colonel Sam Smith Extension (Item No. 2) be added back to the Parks and Recreation Program 1998 Capital Budget.'

Moved by Councillor Sgro:

'It is recommended that $100,000.00 for the Tennis Courts Convert - Amesbury (Item No. 619) be added back to the Parks and Recreation Program 1998 Capital Budget."

Transportation Program:

(3) the 1998 Capital Program - Transportation being amended, in principle, by adding funds for:

(1) Bridge Construction $ 1,530,000.00

(2) F.G. Gardiner Expressway $ 2,000,000.00

(5) Bridge Reconstruction $ 1,350,000.00

(6) Road Resurfacing $ 3,323,000.00

(7) Traffic Control $ 400,000.00

(9) Safety and Operational Improvements $ 500,000.00

Total $ 9,130,000.00;

and further that the Budget Committee be requested to report to City Council on June 3, 1998, on the source of the additional $9,103,000.00 for the 1998 Capital Program for Transportation, possibly from the projected sale of major assets.

(4) to provide that:

"WHEREAS the Capital Budget identifies Previously Approved but Unstarted Projects (Tax Supported) in Appendix A and Previously Approved but Unstarted Projects (Rate Supported) in Appendix B; and

WHEREAS the following projects in Appendix A for reasons stated no longer require funding:

(1) Page 32 of 41 - Sidewalks ($21,000.00)

York Road - Fenn to Glenridge - constructed in 1993

(2) Page 33 of 41 - Sidewalks ($45,000.00)

Daneswood - Stratford to Blythwood - $5,000.00 estimated cost

not constructed by Motion of North York Council 1995

and together constitute a total of $26,000.00; and

WHEREAS the following projects in Appendix B for reasons stated no longer require funding:

(3) Page 36 of 40 - Storm Sewer ($12,000.00)

Daneswood - Stratford to Blythwood

not constructed because deemed unnecessary - 1995

(4) Page 38 of 40 - Storm Sewers

Valleyvanna ($20,000.00) - completed

and together constitute a total of $32,000.00; and

WHEREAS the total amount budgeted and no longer needed for these projects amounts to $58,000.00; and

WHEREAS all above projects are in Ward 9; and

WHEREAS the Local Initiative on Fenn Avenue from York Road South (costed at approximately $40,000.00) is first in the Ward 9 Public Works queue for consideration in 1998, should funds become available;

NOW THEREFORE BE IT RESOLVED THAT the projects (1), (2), (3) and (4) listed above be deleted from the 1998 Capital Budget;

AND BE IT FURTHER RESOLVED THAT the $58,000.00 savings accrued be applied to the Local Initiative on Fenn Avenue;

AND BE IT FURTHER RESOLVED THAT this project be included in the 1998 Capital Works Budget."

(5) to provide that:

"WHEREAS the Audible Pedestrian Signals Program is an important initiative started in 1996, that enables citizens who are visually impaired to cross intersections without the assistance of others, therefore allowing them to live as independently as possible; and

WHEREAS $100,000.00 per year was budgeted for 1997; and

WHEREAS during the budget consultations, the Audible Pedestrian Signals Program was shown to be a new initiative, with no previous funding listed, rather than a continuation of an existing program; and

WHEREAS during the budget process funding was cut to this Program as a result of it being shown as a new project, therefore eliminating the possibility of continuing the installation of these important pedestrian signals;

NOW THEREFORE BE IT RESOLVED THAT the funding for the Audible Pedestrian Signals Program be reinstated into the Transportation Capital Program in order to correct this omission and continue this important initiative for residents of the City of Toronto who are visually impaired."

Police:

(6) by adding thereto the following:

"It is further recommended that City Council request the Toronto Police Services Board to have the City Auditor perform a value for money audit of the expenditures incurred on the Metropolis project, and if additional resources are required by the City Auditor to perform the review, such request be made to the Budget Committee."

Toronto Harbour Commission (No. 60):

(7) to provide that the matter of the proposed fixed link project at the Toronto City Centre Airport be referred to the Urban Environment and Development Committee, for further consideration, and the Committee be requested to:

(a) consider the potential impacts on the police marine unit to meet its objectives and any other additional costs resulting from this link; and

(b) review the "screening" Environmental Assessment on the fixed link to the Toronto City Centre Airport.

(8) by adding thereto the following:

"It is further recommended that:

(a) the report dated April 23, 1998, from the Chief Financial Officer and Treasurer, entitled 'Toronto Harbour Commissioners - Financing Options for the Fixed Link Project', be adopted, subject to amending Recommendation No. (2) by inserting the words 'and the Budget Committee', after the words 'and Treasurer', and adding at the end thereof the words 'and that such financing assumes no net cost for the City's Capital Budget', so that the recommendations embodied in such report shall now read as follows:

'It is recommended that:

(1) the THC submit to the Chief Financial Officer and Treasurer a revised 5-year business plan for the Toronto City Centre Airport as well as any supplemental financial analysis of preferred options; and





(2) the financing authority for the fixed link project in the recommended 1998 Capital Budget for the THC be deferred pending a report from the Chief Financial Officer and Treasurer and the Budget Committee respecting the financial implications of financing the fixed link capital project and that such financing assumes no net cost for the City's Capital Budget.'; and

(b) the Commissioner of Urban Planning and Development Services be requested to submit a report to the next meeting of the Urban Environment and Development Committee on whether plans are being considered by the Toronto Harbour Commission to substantially lengthen the City Centre Airport runway and grant landing rights to DC-9s.' "

Tax Options - 1998-2000 (No. 65):

(9) by adding thereto the following:

"It is further recommended that City Council advise the Province of Ontario that the City appreciates the $50 million grant, and inasmuch as the terms regarding the $200 million interest free loan offered by the Province over two years have not been finalized, and insofar as no other municipality in Ontario is being asked to take Provincial funds in the form of a loan, the City would urge the Province to consider providing such $200 million in the form of a grant, in order that the City could better determine its budgetary needs in the coming years."

Proposed Capital Financing Management Plan and Other Capital Funding Issues (No. 70):

(10) by amending the report dated April 16, 1998, addressed to the Budget Committee from the Chief Financial Officer and Treasurer, as embodied in Clause No. 1 of Report No. 6 of The Strategic Policies and Priorities Committee, headed "Proposed Capital Financing Management Plan and Other Capital Funding Issues", by adding to Recommendation No. (3) the words "with such amounts to be reviewed annually in the context of the budget process", so that the recommendations embodied in such report shall now read as follows:

"It is recommended that:

(1) as a guideline, Council adopt future capital programs which would limit average borrowing to a maximum of $110 million for tax supported programs, excluding the impact of TTC downloading and borrowing for the Sheppard Subway;

(2) a Capital Financing Stabilization Reserve be established to minimize fluctuations in future operating budgets due to changes in debt charges and that seed funding be provided from the consolidation of like reserves of the former municipalities;

(3) the base level of capital from current be increased by a minimum of $15 million in 1998 (as contained in the operating budget currently being considered) and that Council approve, in principle, further increases of $25 million in each of 1999 and 2000, $35 million in 2001 and $40 million in each of 2002 and 2003 to offset the impact of Provincial Downloading on the capital program of the TTC, estimated at a total of $180 million annually with such amounts to be reviewed annually in the context of the budget process;

(4) the Chief Financial Officer and Treasurer review, and bring forward for Council's consideration as appropriate, potential offsets against future capital from current increases contained in recommendation (3); and

(5) proceeds from major asset sales be applied to reduce borrowing each year, unless Council specifies that a portion of these proceeds be used to fund major rehabilitation and maintenance projects."

Establishment of City Reserves and Reserve Funds (No. 72):

(11) by amending Recommendation No. (3) of the report dated April 16, 1998, addressed to the Budget Committee, from the Chief Financial Officer and Treasurer, as embodied in Clause No. 12 of Report No. 6 of The Strategic Policies and Priorities Committee, headed "Establishment of City Reserves and Reserve Funds", by adding thereto the words "and that such by-law be submitted to Council through the appropriate Standing Committee and the Budget Committee", so that the recommendations embodied in such report shall now read as follows:

"It is recommended that:

(1) reserves and reserve funds in the amount of $915,445,484.00 be established and consolidated where appropriate as listed in Schedule I;

(2) a further report on the adequacy of each reserve and reserve fund established be brought back as soon as possible after an analysis of projected inflows and outflows is complete; and

(3) staff be directed to prepare a by-law giving effect to the consolidation or continuance of reserve funds included in this report, and that such by-law be submitted to Council through the appropriate Standing Committee and the Budget Committee."





(12) by adding thereto the following:

"It is further recommended that any decision to exercise discretion to use reserve funds for any purpose other than that for which the fund was established in matters greater than $50,000.00 be exercised only with the concurrence of Council."

General:

(13) to provide that Recommendation No. (1) of the Budget Committee, as embodied in Clause No. 5 of Report No. 6 of The Strategic Policies and Priorities Committee, headed "Leaf Pick Up Program in Ward 16", be amended by inserting the words "and Guildwood Village" after the words "West Rouge Community", so that the recommendations of the Budget Committee shall now read as follows:

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

(1) the reinstatement of the fall leaf vacuum collection in the West Rouge Community and Guildwood Village for 1998;

(2) that the cost of the reinstatement of this program be absorbed within the Departmental budget; and

(3) that this program be subject to the service review being carried out on all programs."

(14) to provide that the following adjustments be made to the capital financial authorizations included in the report dated April 16, 1998, from the Chief Financial Officer and Treasurer, entitled "Recommended 1998 Capital Budget and Financing Authorities":

($000)

Solid Waste Management Program

(a) City-Recycling Facilities 409

Water Pollution Control Program

(b) East York - Sewer Construction - Various 343

(c) Etobicoke - Storm Sewers 380

(d) Etobicoke - Sanitary Sewers 1,190

(e) Toronto - Construction of Sewers 1,000

Water Supply Program

(f) City - P/Harris - Residue Management Facility 32

(g) Scarborough - Water Connection 350

Total 3,704

(15) by adding thereto the following:

"It is further recommended that:

(a) the McCormick Recreation Centre and Eatonville Library requests be considered in the five-year Capital Plan; and the Budget Committee be requested to advise Council on any design funding requirements by September 1998;

(b) Council establish a User Fee Committee, such Committee to report back to Council, through the Strategic Policies and Priorities Committee, no later than its first meeting in September 1998; and that the following proposed membership of the User Fee Committee be referred to the Striking Committee for consideration and report thereon to the next regular meeting of Council to be held on May 13, 1998:

Councillor Giansante;

Councillor Korwin-Kuczynski;

Councillor Li Preti;

Councillor Mammoliti;

Councillor Moeser; and

Councillor Nunziata; and

(c) Council convey its appreciation and thanks to staff, particularly those involved in the budget process, for their efforts and hard work.")




1

Proposed Capital Financing Management Plan and

Other Capital Funding Issues

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer.

The Budget Committee reports having requested the Chief Administrative Officer to review the TTC state of good repair budget and report to the Budget Committee on the appropriateness and financing of those assets and providing a comparison with the other infrastructure in the City.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer forwarding recommendations regarding the proposed Capital financing management plan and other Capital funding issues.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To outline a plan for minimizing fluctuations in future operating budgets caused by the capital budget.

Financial Implications:

There are no immediate financial implications from this report. The recommendations contained herein will reduce the impact of the capital program on future operating budgets.



Recommendations:

It is recommended that:

(1) as a guideline, Council adopt future capital programs which would limit average borrowing to a maximum of $110 million for tax supported programs, excluding the impact of TTC downloading and borrowing for the Sheppard Subway;

(2) a Capital Financing Stabilization Reserve be established to minimize fluctuations in future operating budgets due to changes in debt charges and that seed funding be provided from the consolidation of like reserves of the former municipalities;

(3) the base level of capital from current be increased by a minimum of $15 million in 1998 (as contained in the operating budget currently being considered) and that Council approve, in principle, further increases of $25 million in each of 1999 and 2000, $35 million in 2001 and $40 million in each of 2002 and 2003 to offset the impact of Provincial Downloading on the capital program of the TTC, estimated at a total of $180 million annually;

(4) the Chief Financial Officer and Treasurer review, and bring forward for Council's consideration as appropriate, potential offsets against future capital from current increases contained in recommendation (3); and

(5) proceeds from major asset sales be applied to reduce borrowing each year, unless Council specifies that a portion of these proceeds be used to fund major rehabilitation and maintenance projects.

Council Reference:

Budget Committee, at its meeting on March 12, 1998, directed the Chief Financial Officer to bring forward options for the management of the City's debt and recommendations regarding the disposal of assets in 1998. At its meeting of February 4, 1998, Council adopted a report from the Chief Financial Officer and Treasurer (January 20, 1998), entitled "1998 Capital Works Program - Preliminary Targets". Among the recommendations adopted within that report was the establishment of an interim limit of debt charges to 10 percent of the municipal property tax levy and the setting of a minimum amount and general allocation of capital from current.

Discussion:

In the absence of financial stabilization policies, operating budgets may be subject to substantial fluctuations from year to year which largely result from prior years' Council decisions. This report addresses the following objectives which would otherwise impact on future operating budgets:

(1) establish a Capital Financing Stabilization Reserve which would flat-line debt charges in future years at the 1998 level, excluding impacts of Provincial downloading on the TTC; and

(2) identify preliminary options for addressing the TTC downloading issue.

As well, as requested by the Budget Committee at its meeting of March 9-12, 1998, further options for reducing 1998 borrowing are outlined.

The proposed plan is predicated on Council approving capital programs which, on average, limit annual borrowing to $110 million for tax supported programs (excluding the impact of TTC downloading which is addressed separately, and the Sheppard Subway which is financed from a dedicated reserve account). While one-time deviations from this plan could be accommodated within the program, approval of capital programs above this level on an ongoing basis would result in debt charge pressure in future operating budgets. Until detailed planning and costing of infrastructure maintenance has been carried out, for example, long term facilities and road maintenance requirements, the adequacy of the $110 million borrowing level cannot be determined. As well, there are potential costs on the horizon that could further add to the City's capital pressures. For example, capital requirements have not yet been determined for GO Transit, a potential long term landfill site, or for social housing.

While the ultimate goal of the City should be to establish the capital program on a basis which would reduce future debt charges and move to more of a pay as you go basis, this would be possible only through one or more of the following actions:

(1) reducing future capital expenditures - to the extent that the program is oriented toward maintenance and rehabilitation requirements, it would be inadvisable over the longer term to defer maintenance - longer terms costs would be higher as a result of this strategy whereby rehabilitation could give way to replacement of assets; and

(2) identifying alternative sources of revenue. A process is now underway to evaluate and bring forward recommendations on a City-wide development charges program. As well, other potential revenue sources will continue to be evaluated, for example, asset sales.

It must be recognized, though, that the combined impacts of the above actions will be unlikely to offset a significant portion of the Provincial TTC downloading. As well, the Operating Budget will continue to be stretched to accommodate the operating impact of downloading and the City's own pressures, and cannot be expected to also absorb the capital downloading. The inescapable conclusion is that successive operating budgets should accommodate the TTC downloading. Options for phasing in these operating increases are discussed later in this report.





Fluctuations in Debt Charges:

One component of the operating budget which can fluctuate from year to year and which is largely beyond the control of Council in each year is the reduction in debt charges from maturing debt. Decisions made with respect to capital borrowing up to 10 years prior have a direct bearing on the level of debt charges each year, regardless of the capital program being considered. This will occur, even if, for example, Council adopted a capital program over the next five years which approximated a stable borrowing level of $110 million, exclusive of the impact of Provincial TTC downloading, and the Rapid Transit Expansion Program which is discussed later in this report.

To offset these fluctuations in debt charges, it is recommended that a Capital Financing Stabilization Reserve be established. Currently, reserves exist in the former municipalities for capital financing purposes, with an aggregate 1998 opening balance of approximately $30 million. On the basis that Council approves successive capital programs which maintain tax supported borrowing requirements of an average of $110 million, exclusive of the impact of TTC downloading, then the reserve could be used to stabilize debt charges in future years at the 1998 level. In those years where debt retirements were low, or, because of market conditions, borrowing occurred earlier in the year, withdrawals could be made from the reserve. Alternatively, when retirements were high or borrowing occurred later in the year, provisions could be made to the reserve. Over time, the reserve could be expected to maintain a constant balance.

Following illustrates how the reserve could work with annual borrowing of $110 million. The actual provisions and withdrawals to and from the reserve will vary from these, based on actual market conditions, timing of borrowing, levels of capital expenditures, capital from current changes based on the recommendations above, etc.

Capital Financing Stabilization ($Million)

1998 1999 2000 2001 2002

Change in Tax Supported Debt Charges

($110 million annual borrowing excl.

Impact of Provincial TTC

Downloading and RTEP): 0 8 (12) 4 (8)

Offset To/(From) Stabilization Reserve 0 (8) 12 (4) 8

Net Change in Debt Charges 0 0 0 0 0

Capital Financing Stabilization Reserve

Opening Balance 30 30 22 34 30

Provisions/(Withdrawals) 0 (8) 12 (4) 8

Closing Balance 30 22 34 30 38





TTC Downloading:

The above recommendations are designed to manage fluctuations in future operating budgets. They exclude the impact of Provincial downloading on the TTC on basis of the fact that the balance of the capital program, which is mainly dedicated to infrastructure rehabilitation and maintenance, cannot absorb the downloading. In fact, the impact of approximately $180 million is more than one and a half times the stable borrowing level. Were the balance of the capital program to be maintained, i.e. requiring annual borrowing of $110 million, and no offsets found against the downloading, the total annual borrowing requirements would rise to $290 million by the year 2001. Debt charges would rise over the next 20 years from the current level of $200 million to $470 million, requiring average increases in the operating budget of $14 million, or 0.5 percent every year for 20 years. At the same time, debt charges as a percent of property taxes would rise from the current level of 7.5 percent to 18 percent. At some point, the inevitable downward implications on the Corporation's credit rating could also affect the City's borrowing rate, which would further push future capital financing costs higher.

To maintain the Corporation's infrastructure, limit future operating budget impacts, and maintain the City on a sound financial footing, it is critical that the TTC downloading issue be addressed decisively. As such, it is recommended that the base level of capital from current be increased by a minimum of $15 million in 1998, as contained in the preliminary budget being considered by the Budget Committee. From a financial standpoint, the ideal solution would be to fully offset the impact of downloading in each year through corresponding increases to capital from current, i.e. $45 million in 1998, and a further $15 million in 1999, $5 million in 2000 and $115 million in 2001. However, from a practical standpoint, this may place undue burdens on the operating budget in certain years. Instead, it may be preferable to phase in the increases to capital from current and borrow the remaining shortfall in each year.

It is therefore recommended that Council approve, in principle, additional increases to the base operating budget of $25 million in each of 1999 and 2000, $35 million in 2001 and $40 million over the succeeding two years to offset the impact of Provincial Downloading on the capital program of the TTC.

Following is a summary of the impacts of the TTC downloading and recommended approach:

Impacts $Million

1998 1999 2000 2001

Annual Provincial Downloading Impact 45 60 65 180

Cumulative Capital From Current Increase 15 40 65 100

Borrowing for Remaining Shortfall 30 20 0 80

Accumulated Debt Charges on Shortfall 1 5 7 10



Although these recommendations will cause very significant operating pressures over the next few years, these increases are critical to the ongoing financial condition of the Corporation. To the extent that there may be other options to the recommended capital from current increases, it is recommended that potential offsets be reviewed and brought forward for Council's consideration as appropriate.

Funding of the Rapid Transit Expansion Program (Sheppard Subway):

A further factor which will affect future debt charges is the Sheppard Subway. When Metro Council approved construction of the line in 1996, it dedicated $12 million annually to a reserve to fund future debt charges, which translated at that time into a one percent dedicated tax. This increase was predicated on the fact that the balance of Metro's capital program or operating budget could not absorb the impact of RTEP. At that time, Metro Council was apprised that further increases in the annual provision to the reserve of approximately $24 million would be required to fully offset the debt charges and the approval of the RTEP program was made on that basis.

Based on the total expenditures to date and projected cash flows and a continuation in the operating budget of the $12 million annual provision, the existing reserve will be insufficient to offset the debt charges by the year 2000. In that year, the shortfall will be $7.6 million and will grow to approximately $24 million following completion of borrowing for the line in 2002. Council will be given the opportunity at that time to increase the annual contribution to the reserve, increase the operating budget by the amount required each year to fund the debt charges, or incorporate other potential financing options. The impacts of RTEP debt charges have not been factored into the capital financing options identified in this report, above. In other words, the recommended capital financing stabilization reserve is not intended to fund debt charges related to RTEP.

Summary of Operating Impacts From Above Recommendations:

In total, the following operating impacts would result from the above recommendations:

Annual Operating Impacts $Million

1998 1999 2000 2001 2002

Base Program (After Stabilization Reserve) 0 0 0 0 0

TTC Provincial Downloading:

Capital From Current Increase 15 25 25 35 40

Accumulated Debt Charges From

Remaining Shortfall 1 4 2 3 11

RTEP Additional Requirements 0 0 8 10 5

Total Projected Annual Impacts 16 29 35 48 56



Potential Offsets Against 1998 Borrowing:

Following is a breakdown of the net borrowing requirements for tax supported programs (excluding Sheppard Subway) based on the 1998 Capital Budget recommended by the Budget Committee at its meeting of March 31 and April 2 and 3, 1998:

$Million

Base Program TTC Downloading Total

Net Requirements 270 45 315

Potential Underspending/

Cash Flow Deferrals (46) 0 (46)

Capital From Current/Other

Internal Funding (131) (15) (146)

Borrowing 93 30 123

Incorporated within the above financing is one time revenues of $20 million. In a communication dated March 11, 1998, the Chairman of the Toronto Parking Authority indicated that, on a one time basis in 1998, surplus capital reserve funds in the amount of $20 million could be made available to the City. Given that a sizeable portion of the 1998 Capital program is committed to past funding decisions and that the new City has not had the time to fully review its long term capital priorities, it is appropriate to use funding of this type on a one time basis to reduce 1998 borrowing requirements. Of the $20 million proposed by the Authority, $10 million was included as a potential funding source within the Capital from Current and Other Internal Funding previously tabled with the Budget Committee. The balance of $10 million has been applied in the above table and reduces the borrowing for the recommended base program to $93 million, below the long term stable borrowing level of $110 million.

A second potential capital financing tool is the sale of surplus City owned properties and other major assets. From a financial perspective, an appropriate use of these funds is against capital borrowing requirements. One option would be to apply proceeds from asset sales to reduce debt each year and make corresponding increases to the capital from current allocation equal to the debt charges avoided from this action.

As an illustration, were the City to secure surplus revenues annually of $35 million over ten years from sale of assets or other sources and applied these amounts to reduce annual borrowing, the City could increase its capital from current by $80 million and reduce its annual debt charges by $90 million, while maintaining a base capital program at the 1998 level (again, excluding the impact of TTC downloading and RTEP). At that rate, one half of the annual reductions in debt charges from the retirement of old debt would be converted to additional capital from current each year. There is no indication at this time that such surplus revenues would be available, but the same concept could apply to lesser amounts which would help to reduce the reliance on debt. The change in mix of capital financing from capital from current and debt charges from this scenario is illustrated in the following graph:



Given that surplus asset sales provide a temporary source of funding, it may also be appropriate during the transition to the new City to use such funds to offset borrowing required for transition related projects. The funding of such projects will be the subject of a separate report.

The Case for Debt Financing:

Several major trends continue to influence domestic and international financial markets. The effects of global access to markets, deregulation, competition as well as new financing alternatives have created new opportunities for innovation and being able to achieve lower borrowing costs.

Although the City is committed to reducing its reliance on debt issuance to finance capital expenditures over the next five years, it is important to realize that the cost of issuing municipal debt has never been lower over the last thirty years. The financial markets have emerged from a period of extreme volatility, high rates of inflation and federal and provincial deficits to an era of low inflation accompanied by low interest rates not seen since 1968 and the virtual elimination of current budgeted operating deficits. Even with a declining need for debt being established as an objective to be achieved over the next five years, it is important to have the ability to participate in the financial markets with an appropriate degree of flexibility to ensure that the City's transactions are successful and result in the lowest cost of funds available. Therefore, although a target of $110 million in average debt issuance is being recommended, there must be the ability to vary this amount as well as the term-to-maturity on occasion, depending upon market conditions. Debt financing occurs in a highly specialized environment and requires the ability to be able to respond to economic and financial indications as judged to be appropriate.



Debt, when managed properly, is one of several efficient and effective methods of financing capital projects. It can be used to equate the costs and benefits of capital expenditures over the useful economic life of the asset in order to transfer the cost of infrastructure between current and future generations who will also benefit from the project. This argument is suited to growth-related projects with an extended useful life such as a subway and not for regular maintenance and required renovation which should either be financed from current funds or through debt with a relatively short maturity.

In order to handle an emergency, such as the ice storm which affected parts of eastern Ontario and Quebec earlier this year, debt financing may be the only reasonable course of action available to cover these types of expenditures.

Although it may be difficult to measure at the municipal level, responsible and well-managed debt financing can have a positive impact on the local economy by providing jobs, income and a demand for construction materials whereby the alternative would be a deferral of various projects until funding could be provided from current funds. By avoiding these delays, the City may be able to take advantage of favourable economic conditions whereby a skilled labour force, combined with lower material costs can actually create cost-savings and allow a project to be completed under-budget and on time.

In order for a capital financing management plan to be effective, it must be responsive to external economic and financial conditions and not artificially constrain the ability to participate in domestic and global capital markets in order to achieve the lowest cost of funds available through a successful transaction.

Conclusions:

The recommendations contained in this report would serve to minimize the fluctuations in future operating budgets due to annual changes in debt charges. Further, specific recommendations with respect to capital from current funding to offset the impacts of Provincial downloading on the TTC are identified. Although these will dramatically impact on the operating budget over the next few years, the actions are necessary to maintain the City's long term financial stability and infrastructure. Finally, recommended application of one-time offsets against borrowing would reduce the impact of future debt charges on the operating budget.

Contact Name:

Len Brittain, 392-5380; Fax: 392-3649; Internet: len_s._brittain@metrodesk.metrotor.on.ca

2

1998 Operating and Capital Budget for the Water and

Water Pollution Control Programs and Harmonization of

Water and Sewer Rates

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the 1998 Capital and Operating Budgets for the Water and the Water Pollution Control Programs, including the following:

(1) the transfer of $18.6 million of expenditures from the mill rate to the water rate;

(2) expenditure reductions and fee adjustments totalling $14.9 million, excluding the early payment discount or late payment penalty as applicable;

(3) a general water rate increase of 2 percent or $3.7 million effective July 1, 1998 applicable to all water users; and

(4) the deferral of water rate harmonization to January 1, 1999, to be considered as part of a report on the harmonization of all fees and service levels in the new City.

The Budget Committee reports having requested the Chief Financial Officer and Treasurer to submit a report to the Budget Committee in the fall of 1998 on a recommended phase-in for the harmonization of all user fees and service levels across the entire City commencing in 1999.

Background:

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

(a) letter of transmittal (April 9, 1998) from the Scarborough Community Council regarding the 1998 Operating and Capital Budget for the water and water pollution control programs and harmonization of water and sewer rates;

(b) report (April 17, 1998) from the Chief Financial Officer and Treasurer regarding a follow-up report to the Scarborough Community Council meeting of April 9, 1998; and

(c) report (April 20, 1998) from the Interim Lead Economic Development regarding the impact of the harmonization of water and sewer on business in the community of Scarborough.

--------

(Transmittal letter dated April 9, 1998, addressed to the

Budget Committee from the

Scarborough Community Council)

Recommendations:

The Scarborough Community Council, on April 9, 1998, directed that the Budget Committee be advised that Scarborough Community Council supports:

(1) that the rates in Toronto, East York and York remain at a constant level for this year versus last year, and that the additional revenue be used to accelerate the meter program;

and recommends:

(2) that the water harmonization fees in Scarborough be deferred until harmonization of all fees and service levels in the City is reviewed and reported to Committees and Council;

(3) that the Chief Financial Officer and Treasurer be requested to report to Budget Committee with the following additional information:

(a) the status of the various Reserve Funds maintained by the former municipalities and the Utility Commissions with regard to this issue;

(b) the impact of deferral on the harmonization of rates on the overall budget and the alternatives for funding;

(c) the viability of harmonizing water and sewer rates over a variety of time periods with the residents in areas experiencing increases receiving some form of compensation from utility reserve funds to offset the increases;

(4) that the Interim Lead, Economic Development, be requested to report to Budget Committee on the impact of the harmonization of rates on businesses;

(5) that the Chief Administrative Officer be requested to report on a public information programme;

(6) that Council consider the following issues when setting the water and sewer rates for the City of Toronto:

(a) the age of the district infrastructure for sewer and water systems;

(b) the condition rating of the district systems;

(c) the maintenance needs of the total system;



(d) the rate of maintenance spending by district:

(i) direct staff to report back later in 1998 on the method of harmonizing the maintenance standards and spending levels per district;

(ii) in the interim, maintain as much as possible, the current levels of expenditure per district, until Council has made a decision on service level harmonization for infrastructure maintenance; and

(7) that any harmonization of water and sewer rates be subject to the implementation of a property tax credit/discount mechanism for the former City of Scarborough ratepayers, sufficient to reflect the quantum dollar shift from tax-supported sewer/water infrastructure costs in Scarborough.

Background:

The Scarborough Community Council had before it a communication (April 6, 1998) from the City Clerk, referring a copy of the report (April 3, 1998) from the Chief Financial Officer and Treasurer, dealing with:

(1) the 1998 Operating and Capital Budget for the Water and Water Pollution Control Programs, including recommendations on rates;

(2) User Service Fees, Water Rebate Programs and Sewer Service Rebate Programs; and

(3) the Harmonization of Water Rates;

and advising that Budget Committee, on April 3, 1998, recommended that:

(1) the implementation and impact of the harmonization of water and sewer rates on the former City of Scarborough be deferred to the meeting of the Budget Committee scheduled for April 20, 1998; and

(2) Scarborough Community Council be requested to hold an emergency meeting before April 20, 1998, to discuss this issue and to provide a report to the April 20, 1998, meeting of the Budget Committee.

--------

(Report dated April 17, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

This report is a follow-up to the emergency meeting of the Scarborough Community Council held on April 9, 1998 at the request of the Budget Committee.

Recommendation:

That this report be received for information.

Background:

On April 3, 1998, Budget Committee considered a report on the '1998 Operating and Capital Budget for Water and Water Pollution Control, and Harmonization of Water and Sewer Rates'. The Budget Committee recommended that the Scarborough Community Council hold an emergency meeting to discuss a number of related issues.

Subsequently, the Scarborough Community Council met on April 9, 1998 to review the staff report. The minutes from that meeting are part of the agenda and the amendments from the April 3, 1998 Budget Committee meeting are attached to this report (see Attachment A). Following is a report that addresses some of the questions raised by the Scarborough Community Council.

Issue (Item 3(a) ):

"The status of the various Reserve Fund maintained by the former municipalities and the Utility Commissions with regard to this issue" .

Comment:

Fund balances as at January 1, 1998 relating to water and sewer reserves are as follows:

Former Municipality ($ million)

Metro 144.4

Toronto 17.3

North York 7.6

Scarborough 4.3

Etobicoke 4.7

York 0.5

East York 3.8

TOTAL 182.6

The 1998 Capital and Operating Budget has minimal impact on these Reserve Fund balances as additions to and withdrawals from the reserves reduce the above balances by only $1.6 million. Appendix A provides more detail on the reserve funds.

Issue - (Item 3(b) ):

"The impact of deferral on harmonization of the rates on the overall budget and the alternatives for funding"

Comment:

The Water Rate harmonization proposal before Council is revenue neutral. Revenue gains from users whose rates are increasing offset the revenue loss from users whose rate are decreasing. Deferring the start of water rate harmonization by 1, 2, 3 year or longer will not change the total revenue received as long as water usage patterns remain similar to the current pattern; it only changes the rate of increases and decreases as shown in the following tables.

Table 1

Water Rates by Municipality - Two-Year Phase-in

Current Rates

Price/m3

Impact of first year 40% in year 1

(includes 2% rate increase)

Impact in 2nd year 60% in year 2

(includes 2% rate increase)

Harmonized Price

Immediately

Price/m3

$

Annual

$ Change

Users (3)

% Change Price/m3 Annual

$ Change

Users (3)

% Change Price/m3 Annual

$ Change

Users (3)

% Change
Toronto

North York

SPUC/Scarb.

Etobicoke

York

East York

1.0106

0.9248 0.7826

0.8843

0.9940

1.0140

0.9830

0.9315

0.8462

0.9072

0.9730

0.9850

(6.90)

1.68

15.90

5.73

(5.24)

(7.24)

-2.73%

0.73%

8.12%

2.59%

-2.11%

-2.86%

0.9416

0.9416

0.9416

0.9416

0.9416

0.9416

(10.36)

2.51

23.84

8.59

(7.87) (10.87)

-4.40%

1.07%

10.13%

3.65%

-3.34%

-4.62%

0.9416

0.9416

0.9416

0.9416

0.9416

0.9416

(17.26)

4.19

39.74

14.32

(13.11)

(18.11)

-6.83%

1.81%

20.31%

6.48%

-5.28%

-7.14%

Harmonized

Price

0.9231 0.9416 0.9416 0.9416

1. First year rates to take effect July 1, 1998.

2. Fully harmonized rates to take effect July 1, 1999

3. 250 cubic metres is used annually by average residential water user

Table 2

Annual Increases for Scarborough if

Phase-In Extended Beyond 2 Years

Phase In Period

(Years)

Annual Increase

%

Total Increase

%

3 6.35 20.31
4 4.73 20.31
8 2.33 20.31



Immediate Phase In:

There would be an immediate increase of 20.3 percent for most Scarborough water users and decreases of 7.1 percent for East York water users. The water users in other municipalities will experience smaller changes as indicated in Table 1.

Phase-In Period - 2 Years:

Under this option, they range from a decrease of 2.9 percent to an increase of 8.1 percent in year one and a decrease of 4.6 percent to an increase of 10.2 percent in year two. This mitigates the impact of the changes while not drawing out the process of harmonization over an extended period of time.

Phase-In Period - 3 Years:

This further smooths out impacts as changes range from decreases of more than 2.3 percent in East York to increases of 6.4 percent annually for Scarborough.

Longer Phase In Period - e.g. 8 years:

A longer the phase in period would lead to a further smoothing out of any impact on the water users and relatively smaller total dollar changes. Scarborough customers under this option would experience an increase of 2.4 percent annually.

Issue - (Items 4 and 5):

- that the water rates for Toronto, York and East York not be decreased

- "that revenues generated from the approval to allow existing rates to remain in place in Toronto, York and East York be used to accelerate the Metering Program"

Comment:

The staff report to the April 3, 1998 Budget Committee recommended a two-year phase in for all municipalities. Scarborough, North York and Etobicoke rates would go up, while Toronto, East York and York would experience a decrease. Deferring the decreases for Toronto, East York and York until the third year, while increasing rates for Scarborough, East York and York to the proposed harmonized rate of $.9416/cu. metre over a two-year period, would result in revenue gains as shown below in Table 3:

Table 3

Revenue Impact of Maintaining Current Rates

in Toronto, East York and York

($ Million)

Old Municipality Year 1 Year 2 and Subsequent Years
Toronto 3.6 9.1
East York 0.4 1.1
York 0.5 1.1
TOTAL 4.5 11.3

Cumulative Savings

($million)

Year 1 4.5

Year 2 15.8

Year 3 27.1

These additional revenues may be used to pay for the conversion of flat rate to metered conversion for accounts for approximately 88,000 customers in the old City of Toronto. Deferral of decreases over three years would pay for a complete conversion to metered accounts over a three year period, based on an average cost of $300.00 per conversion.

It should also be noted that going to fully metered accounts will increase operating costs for administration, meter reading and billing. Also, the revenue received from these customers may decrease as water usage will go down. These factors may place added pressures on the water rates in the future.

Issue (Item 3(c) ):

"the viability of harmonizing the water and sewer rates over a variety of time periods with the residents in areas experiencing increases receiving some form of compensation from utility reserve funds to offset the increases"

Comment:

Another way to mitigate the effect of harmonization on Scarborough water users would be to harmonize rates for the former municipalities of Toronto, East York, York, North York and Etobicoke over a two-year period and to extend harmonization for Scarborough over a three year, four year, or longer period. As shown in Table 4 this would reduce the annual rates of increase for Scarborough, but would cost $6.0 million if the Scarborough phase-in were extended to 3 years, $13.0 million if extended to 4 years and $41.0 million if extended to 8 years.

Table 4

Cost of Deferring Scarborough's Harmonization

While Phasing In Other Municipalities

to $.9416/cu. metre Over Two Years

Harmonization - Scarborough

Period (Yrs)

Cost

($ Million)

3 5.4
4 13.0
8 41.0

Conclusion:

On the assumption that Toronto should move to a harmonized water rate for all areas within its new boundary, the issue before Council is how to minimize the impact of the phase-in on those municipalities that would experience an increase. As shown in Table 1, Scarborough would require the largest increase, at 20.3 percent, followed by Etobicoke at 6.5 percent and North York at 1.8 percent. A number of options have been put forward to mitigate these impacts. These range from extending the phase-in period for all municipalities; extending the phase-in period for Scarborough only; freezing the rates for Toronto, York and East York for two years, while phasing-in increases for the three municipalities whose rates go up, over two years. If the latter option were adopted, the additional revenues generated would be used to pay for major system upgrades, including the conversion of all existing flat rate accounts to metered ones.

Contact Name:

Nick Kristoffy, 392-7051

Attachment A

10. that prior to any financial commitment being made by the Toronto Police Services Board for the following capital projects:

(a) No. 037: Occurrence Re-engineering, ($4,997,000.00);

(b) No. 054: MDT Replacement ($3,650,000.00); and

(c) No. 057: Radio System Re-engineering ($2,700,000.00);

approval must be obtained from the Chief Administrative Officer who has been requested by the Budget Committee to review these projects in the context of the Information Technology review.

The Budget Committee reports having requested that:

(a) when the Chief Administrative Officer is conducting an internal review of the Audit functions, other support functions within the City and the Police Department and the benefits, if any, of amalgamating them under one department also be considered;

(b) the Chief Administrative Officer and Chief Financial Officer and Treasurer report to the Budget Committee as soon as possible on the impact on the 1999 Operating Budget with respect to the additional officers required to meet the target of 4009; and

(c) the Commissioner of Corporate Services report to the Budget Committee at is next meeting scheduled for May 26, 1998 with respect to the acquisition of the land for the replacement of 51 Division.

The following persons appeared before the Budget Committee in connection with the Toronto Police Services Budgets:

- Councillor Norman Gardner, Chair of the Toronto Police Services Board;

- Chief David Boothby;

- Mr. Hugh Moore, CAO - Policing; and

- Deputy Chief Steve Reesor.

Water and Water Pollution:

The Budget Committee reports having approved the 1998 Capital and Operating Budgets for Water and Water Pollution with the following amendments:

(1) that the Etobicoke free sandblasting of water service connections ($73,000.00) be reinstated;

(2) that $580,000.00 be reinstated for the following programs:

(a) Water Conservation Program Consolidation ($350,000.00)

(b) Reduce Downspout Disconnection Program ($230,000.00);

(3) that an off-setting amount be identified from other amalgamation savings for funds reinstated in recommendations 1. And 2.;

(4) that the water rates from Toronto, York and East York not be decreased;

(5) that revenues generated from the approval to allow the existing water rates to remain in place in Toronto, York and East York be used to accelerate the Metering Program;

The Budget Committee reports having requested that:

(a) the implementation and impact of water rate harmonization in the former City of Scarborough be deferred until the meeting of the Budget Committee scheduled for April 20, 1998;

(b) Scarborough Community Council be requested to hold an emergency meeting before April 20, 1998;

(c) Finance staff be in attendance at the emergency meeting of Scarborough Community Council;

(d) report be brought back to the Budget Committee on April 20, 1998 on the outcome of the Scarborough Community Council meeting;

(e) staff report to the Budget Committee on the cost implications of extending the Water Service Replacement Program over the entire City and determine funding for same;

(f) the Chief Administrative Officer report to the Budget Committee on the Best Practices Program outlining savings and efficiency improvements with regard to operations and defer further commitment until receipt of said report.

The following persons appeared before the Budget Committee in connection with Water and Water Pollution Budgets:

- Councillor Jack Layton, Don River; and

- Councillor Ron Moeser, Scarborough Highland Creek.

--------

(Report dated April 20, 1998, addressed to the

Budget Committee from the

Interim Functional Lead, Economic Development)

Purpose:

The purpose of the report is to demonstrate the impact of the proposed harmonization of water and sewer rates on business located in the community of Scarborough. The companies most affected by the proposed harmonization of water rates are those that rely on significant supplies of water for production purposes as compared to those that use water for domestic purposes only.

Source of Funds:

No funds required.



Recommendations:

For information of Finance Committee.

Council Reference/Background/History:

Scarborough Community Council requested the Interim Lead, Economic Development to report to Budget Committee on the impact of the harmonization of water rates on businesses in Scarborough.

Comments:

The harmonization of water rates across the new Toronto will have the most severe impact on Scarborough businesses as compared to businesses elsewhere in Toronto. The proposed rate of $ .9416 per m3 is a 20 percent increase from the current Scarborough rate of $ .7826 per m3. As the table below demonstrates Scarborough, Etobicoke, and North York will have an increase with Toronto, East York and York experiencing a decrease.

Water Rate Harmonization Comparison

Former Municipalities Current Situation

Price per m3

Proposed Harmonized Rate
Toronto $1.0106 $ .9416
North York .9248 .9416
Scarborough .7826 .9416
Etobicoke .8843 .9416
York .9940 .9416
East York 1.0140 .9416



The seven largest industrial water users in Scarborough are shown in the accompanying table which are impacted significantly by water and sewer rate harmonization. Proposed rate increases, including rebates, at full implementation, ranges from $45,179.00 for the smallest water user to $260,263.00 for the largest water user based on estimates provided by City of Toronto Finance Department staff.

Each company has been contacted by staff to determine the impact of the proposed new rates on their Scarborough operations. In all cases, increases in the cost of water would have a significant negative impact on operations and impact future expansion considerations.



It may be extreme to state categorically that new investment in plant and equipment will be directed elsewhere but it is not irrational to expect that incremental increases in taxes and fees will impact negatively upon each company's profitability. It should be noted that at least one company affected by the potential rate increase moved to Scarborough because of the then favourable water rates.

The accompanying chart, showing the seven companies in the community of Scarborough most affected by the rate changes, demonstrates their importance to the City of Toronto in terms of assessment and employment. The chart also states the amount of the dollar increase and summarizes each of the companies' concerns relating to future investment.

Largest Users of Water in the District of Scarborough.

Company

(product)

Assessed Value

(CVA 1998)

No. of Employees Proposed$ Increase Comments
Atlantic Packaging

(paper products mfg.)

6,259,000 500 260,263
AFG Industries

(flat glass mfg.)

12,176,000 400 145,951 Will initiate new investment to sister plants elsewhere.
Gentry Knitting Mills

(fabric mfg.)

3,364,000 150 112,848 New capital projects may be redirected to plant in N. Carolina.
Bicks Pickles

(food processing)

3,143,000 170 84,227
International Group

(wax mfg.)

2,863,000 130 53,870 Increased costs will influence new expenditures
Graphico

(circuit board mfg.)

1,172,000 135 53,768
Helix Circuits

(circuit board mfg.)

3,456,000 220 45,179 Cost increases jeopardize future investments.



Some of the companies identified in the chart have forwarded by fax their concerns. Copies are attached.

The average increase for the top fifty industrial water users is $30,000.00 per annum excluding the seven largest which receive volume discounts. The majority of business in Scarborough that do not require water as a input to their operations are less adversely affected. However, like property taxation and increasing water and sewer costs are for the most part an uncontrollable cost and directly impact the bottom-line profitability.

Conclusions:

Scarborough-area companies have already paid for the infrastructure improvements through adjustments to water rates and general tax levies in previous years. It appears that these same companies would be subject to a form of double taxation should the proposed rate structure be implemented.

Some of the firms contacted suggested that a lengthier phase-in period for Scarborough-area companies be considered and that the annual increase in rates be limited to the Consumer Price Index until such time as the rates throughout the City become harmonized.

Contact Names:

F. Bruce Graham, Manager Business Development , Scarborough Office, Phone: 396-7066,

Fax: 396-4241, E-mail: graham@city.scarborough.on.ca.

D. Ronald Rea, Business Development Advisor, Scarborough Office, Phone: 396-5141,

Fax: 396-241, E-mail: rea@city.scarborough.on.ca.



3

1998 Preliminary Transition Project Requests

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 23, 1998) from the Budget Committee:

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.

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(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 Requests 30,848,000

Staff Exit Cost 45,000,000

Total Gross Costs 75,848,000

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 Requirements 59,492,000 *

(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 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 "Transition Project Reserve Fund" to be used to fund Transition projects;

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

(i) all one-time revenues (unbudgeted or "windfall" revenues),

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

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

(iv) additional Provincial Transition support (if any),

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

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

(vii) 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 "1", 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 "1" 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:

(a) the residual Provincial Loan available after 1998 Current Budget requirements

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

(c) all Corporate "one-time" revenues in 1998 (not already recognized in the 1998 Budget)

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

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

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

(g) 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 percent 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 "1" is recommended at this time as all will be the subject of separate reporting.

Contact Name:

Ross Cuthbert; 397-4214.

(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 percent, or 11.2 million, of this representing operational type expenditures, which should be funded from current funds if available. A further 29 percent, or $39.4 million, represents expenditures for which reserve fund or rate financing has been potentially identified. The remaining 62 percent - 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; and

(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 $750,000.00 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 "return" 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.



(Copies of the reports referred to in the transmittal letter dated April 23, 1998, from the Budget Committee, have been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on April 28, 1998, and copies thereof are also on file in the office of the City Clerk.)



4

1998 Operating Budget - Community and Neighbourhood

Services - Funding Cost of Filling 2,000 Licensed Child

Care Spaces

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) a reserve account be set up into which savings resulting from a social assistance caseload drop below 88,000 be directed;

(2) the purpose of this reserve account be to protect against future caseload increase and that these funds also be available to provide interim funding for the child care costs of up to 2,000 clients leaving social assistance;

(3) a communication be sent to social assistance recipients advising that should they cease to be dependent upon social assistance, child care funding could be available immediately to support their work or study commitments. However, funding from this reserve fund would cease upon re-entry to the social assistance system;

(4) the funding of child care spaces from the reserve fund be contingent upon appropriate provincial cost sharing; and

(5) the Commissioner of Community and Neighbourhood Services report back on the results of the cost sharing discussions with the Province and any implementation progress that follows.

Background:

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

(a) Report (April 15, 1998) from the Commissioner of Community and Neighbourhood Services regarding funding cost of filling 2,000 licensed child care spaces; and

(b) Letter of transmittal (April 16, 1998) from the Children's Action Committee regarding the expansion of child care subsidies.

--------

(Report dated April 15, 1998, addressed to the

Budget Committee from the

Commissioner of Community and Neighbourhood Services)

Purpose:

At the request of the Children's Action Committee, this report has been prepared to provide Council with information concerning the funding cost of expanding child care subsidies to fill 2,000 licensed vacancies within the child care system as recommended by the Children's Action Committee at its meeting held on April 6, 1998.

Funding Sources, Financial Implications and Impact Statement:

The funding identified as necessary to provide the subsidies to fill 2,000 licensed child care spaces is not currently included in the 1998 budget request of the Children's Services Division of the Community and Neighbourhood Services Department. Provincial approval would be required before the cost of these 2,000 additional child care subsidies could be cost shared under the normal cost sharing formula of 80 per cent provincial 20 per cent local contribution.

Recommendations:

It is recommended that this report be received for information.

Council Reference/Background/History:

The Children's Action Committee on April 6, 1998, recommended to Council for its meeting to be held on April 16, 1998 that funding be provided to fill the 2,000 licensed daycare spaces currently vacant; and further, that Council be advised that the Children's Action Committee reiterated point no. (1) of its previous recommendation to the Community and Neighbourhood Services Committee, viz:

"That the following principles be considered during the 1998 budget process:

(1) that there be expansion of child care subsidies to ensure that the 2,000 vacancies in the licensed child care system are filled......"

The Children's Action Committee requested that the Department provide information concerning the cost of funding the 2,000 child care subsidies referenced in the Children's Action Committee recommendation.

Comments and/or Discussion and/or Justification:

The total cost of funding 2,000 additional child care subsidies at a per space cost of up to $7,500.00 would be approximately $15 million. If provincial cost sharing approval for such an expansion was obtained, under the normal cost sharing formula, the City's share would be $3 million and the provincial share would be $12 million. This estimate assumes that these spaces would be used to support the child care needs of Ontario Works participants and, therefore, would not include user revenue.

Conclusions:

The above is provided for the information of the Committee.

Contact Name:

Marna Ramsden, General Manager, Children's Services Division, Tel.: 392-8128.

--------

(Transmittal letter dated April 16, 1998, addressed to the

Budget Committee from the

Children's Action Committee)

Recommendation:

The Children's Action Committee on April 6, 1998, recommended to Council for its meeting to be held on April 16, 1998 that funding be provided to fill the 2,000 licensed daycare spaces currently vacant; and, further, that Council be advised that the Children's Action Committee reiterated point no. (1) of its previous recommendation to the Community and Neighbourhood Services Committee, viz:

"That the following principles be considered during the 1998 budget process:

(1) that there be expansion of child care subsidies to ensure that the 2,000 vacancies in the licensed child care system are filled;..."



5

Leaf Pick Up Program in Ward 16

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) the re-instatement of the fall leaf vacuum collection in the West Rouge community for 1998;

(2) that the cost of the re-instatement of this program be absorbed within the Departmental budget; and

(3) that this program be subject to the service review being carried out on all programs.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Interim Functional Lead for Solid Waste Management and the Commissioner of Works and Emergency Services regarding the fall leaf vacuum collection.

The following Members of Council appeared before the Budget Committee in connection with the foregoing matter:

- Councillor Frank Faubert; Scarborough Highland Creek; and

- Councillor Ron Moeser, Scarborough Highland Creek

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Interim Functional Lead for Solid Waste Management)

Purpose:

To provide information as to the cost of reinstating fall leaf vacuum collection in a selected area of Ward 16, in response to a petition from Michael Mackie, 304 Taylor Road, and accompanying letter of support from Councillor Moeser, and further to report on the cost implications of expanding this service.

Funding Sources:

The estimated annual cost of providing this service in a defined area of Ward 16 is estimated to be between $20,000.00 and $40,000.00 depending upon the tonnage of leaves generated. The provision of the same service level throughout the Scarborough Community Council area is estimated at $1,584,000.00. No funding is available in the 1998, Current Budget proposal for this service.

Recommendation:

That no changes are made in 1998, to the service level or method of collecting leaves throughout the City of Toronto.

Background:

Every fall prior to 1996, for the past 30 or more years, Scarborough's Works and Environment Department has vacuumed loose leaves from specific older areas of the city, primarily in the areas adjacent to and south of Kingston Rd. This service was intended to prevent the flooding of ditches on ditched roads and to prevent the narrowing of the travelled portion of the curbed roads. Residents were permitted to rake their leaves to the curb or into the ditch on uncurbed roads. The remainder of the city received collection of bagged leaves only.

During the 1996, current budget process, in an attempt to meet Council's objective of a 0 percent mill rate increase, staff proposed and Council adopted a service level reduction for the leaf pick up program. The approved service level required all residents living on curbed streets to bag their leaves. The service level remained unchanged for residents of ditched roads. The saving associated with this change was estimated at $100,000.00 and the budget was reduced accordingly.

Between October 1996 and December 1996 this item was debated on several occasions by the Works and Environment Committee and Scarborough Council. Staff was subsequently directed to consider this matter further as part of the 1997, budget deliberations. During this process staff proposed a further service level reduction which would require that all residents bag their leaves for collection. This proposal was adopted by Council and the 1997, budget was reduced by a further $90,000.00.

Discussion:

At the special Budget Committee meeting of April 2, 1998, Committee received a petition (copy attached) from Michael Mackie, 304 Taylor Road. A letter of support from Councillor Moeser was also attached. The petitioners are requesting the reinstatement of the annual Fall Leaf Program within much of the West Rouge Community. Budget Committee directed staff to report on this matter.

While it is acknowledged that the West Rouge Community is heavily treed there are many similar areas within the new city and the former Scarborough. It is the opinion of staff that service levels should be standardized as much as possible and that any new service levels being considered should only be contemplated for introduction on a city wide basis.

In researching this report each of the former municipalities was contacted to determine their practices in this area. Results of this survey are as follows:

East York has never had a residential leaf vac collection system and all residents must bag their leaves. Their Parks Department uses a small leaf vacuum for collection in parks only. Front end loaders are used for bulk collection of loose leaves in heavily treed areas, but only on the road.

Toronto (former) uses a modified hydraulic claw system to pick up loose leaves on municipal property only. Residents are encouraged not to rake their leaves to the curb and are required to bag.

North York uses a claw system for the removal of leaves on the road in curbed areas only. Residents are not allowed to rake their leaves to the street and must bag to receive municipal collection.

Etobicoke operates 18 leaf vacuums. Some areas have no leaf vac service, while heavily treed or ditched areas are vacuumed once and in some areas twice during the five-week program. Residents receiving this service are expected to bag their leaves during the balance of the leaf season. This limited program cost Etobicoke $600,000.00 in 1997.

York utilizes a front end loader for bulk collection of loose leaves for two heavily treed areas only, during a three-week period starting in early November. During this time only, residents can rake their leaves to curbside. All residents in the remaining areas are required to bag their leaves at all times.

In the Scarborough district there are currently four surplus leaf vacuums that could be placed into service. It is estimated that approximately 27 units would be required to collect within the entire Scarborough Community district over a six-week period.

The vacuuming of leaves is an extremely costly and unproductive operation. A typical crew consists of four persons to operate the leaf vac, operate a dump truck, rake leaves and flag vehicles. The hourly cost of $163.00 is almost double that of two persons collecting bagged leaves on a garbage packer, while the daily tonnage collected is significantly less. During the leaf season the leaf vacs typically operate 10 hours per day six days per week. This equates to a six-week operating cost of $58,680.00 per unit. The 27 units necessary to service the Scarborough district would cost $1,584,360.00 annually to operate. A further $460,000.00 would be required to purchase the additional 23 leaf vac units required.

In 1997, the cost of Scarborough's yard waste collection program, which includes bagged leaves, decreased by $5.81 per tonne from $103.74 to $97.93. This decrease is attributed solely to the addition of the leaves formerly collected through the leaf vac program, resulting in improved productivity. The removal of this tonnage would unquestionably increase the cost of providing this program.

Without an in-depth analysis it is not possible to accurately estimate the cost of providing a leaf vac program across the new City of Toronto. However it is safe to assume that the cost could easily exceed $10,000,000.00.

Conclusion:

In the interest of moving toward standardized service levels across Toronto and in consideration of the tremendous pressure to reduce operating costs, the practice of permitting residents to rake their leaves into the ditch or to the curb for collection should not be reinstated.

Contact Name and Telephone Number:

Ron Gordon, Director, Solid Waste, Recycling and Fleet Services, Scarborough Community Council Area, Phone: (416) 396-4771, Fax: (416) 396-4156, E-mail: gordon, Internet: gordon@city.scarborough.on.ca.

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The Strategic Policies and Priorities Committee also had before it the following, which was forwarded to all Members of Council with the agenda of its special meeting of April 28, 1998, and copies thereof are on file in the office of the City Clerk:

- (April 2, 1998) communication from Councillor Moeser

- (March 30, 1998) communication from Mr. Michael Mackie, addressed to the Chair of the Budget Committee

- Petition filed by the residents of Ward 16, supporting the written request of Mr. Michael Mackie.

6

Reconstruction of York Mills Road Between

Hedgewood Road and York Ridge Road

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 22, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that funds in the amount of $40,000.00 be included in the 1998 Capital Budget for engineering design work for the reconstruction of York Mills Road between Hedgewood Road and York Ridge Road.

Background:

The Budget Committee on April 20, 1998, had before it a communication (April 1, 1998) from Councillor Joanne Flint, North York Centre South, requesting that funds in the amount of $40,000.00 be included in the 1998 Capital Budget for the design work in preparation for the reconstruction of York Mills Road between Hedgewood Road and York Ridge Road in 1999.

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(Communication dated April 1, 1998, addressed to the

Budget Committee from Councillor Joanne Flint)

I am upset that the completion of the reconstruction of York Mills Road between Hedgewood Road and York Ridge Road to remove the dangerous hump that now exists is not scheduled for 1998.

It shows nowhere in the Capital Budget! At the very least we should have the design work done this year in preparation for the reconstruction in 1999. I understand that the necessary engineering design work will cost approximately $40,000.00. Please include these funds in the Studies Budget.

I was assured last year that York Mills Road work was on a high priority for completion this year and red-flagged this when I was asked to identify projects in Ward 9 for inclusion in this year's Capital Budget. I am, therefore, extremely disappointed that I was given misinformation and false hope.

(Memorandum dated February 17, 1998, addressed to

Councillor Tom Jakobek from

Councillor Joanne Flint)

Please find below projects in Ward 9 that should be included in the 1998 Capital Budget:

(1) Complete the Jolly Miller parking lot (Toronto Parking Authority). The conditions of Site Plan must be fulfilled as they were agreed to after extensive public consultation in connection with the re-zoning of the property in 1997. This is a TRUST issue and PRIORITY I.

(2) Rebuild York Mills Road between York Ridge Road and Hedgewood Road to eliminate the "hump". This was not included in the Metro 1997 York Mills reconstruction project because of time constraints. Assurances were given to the community that removing the dangerous humped section between York Ridge Road the Hedgewood Road would be given high priority.

(3) Install a traffic signal light on Bayview Avenue at an appropriate place between Post Road and York Mills Road. Arterial road traffic has increased to the point where it is almost impossible to enter/exit the Wilket/Tudor Gate community safely.



7

Mayor's Youth Employment Summit

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following report (April 28, 1998) from the Commissioner of Community and Social Services:

Purpose:

To brief City Council on the initial commitments and strategy developed at the Mayor's Youth Employment Summit.

Funding Sources, Financial Implications and Impact Statement:

That City Council allocate an additional $200,000.00 in funds to support the Mayor's Youth Employment Summit Program: Getting Jobs for Toronto's Youth.

Recommendations:

(1) that $200,000.00 be added to the consolidated grants budget to support the Mayor's Youth Employment Summit Program entitled, Partnerships in Youth Employment: Getting Jobs for Toronto's Youth. This program will be cost-shared with Human Resources Development Canada and the Ministry of Education and Training, who will each contribute $400,000.00, for a total public sector budget of $1,000,000.00;

(2) the program will be a funding partnership between the City, Corporate Sector and Federal and Provincial levels of government. The funding for this program will be contingent on the Corporate Sector matching the funds made available by the three levels of government;

(3) that City Council approve broadening the mandate of the Children's Advocate to include youth and re-naming the position Children and Youth Advocate;

(4) that the Commissioners of Community and Social Services and Urban Development Services, in consultation with the Children and Youth Advocate, submit a more detailed report outlining the various strategies developed at the Mayor's Youth Employment Summit;

(5) that City Council extend their thanks to all the volunteers, City staff and the Summit Planning Committee, particularly Mr. Gordon Cressy, Ms. Susan Pigott and Mr. Holger Kluge, who assisted in the Mayor's Youth Employment Summit; and

(6) that the appropriate City officials be authorized and directed to take the necessary actions to give effect thereto .

Background:

As identified in my report to the April 15 and 16, 1998, meeting of City Council, The Mayor's Youth Employment Summit was held on April 27, 1998, at Metro Hall. This report was prepared on the request and in consultation with Mayor Lastman's office. Mayor Lastman's proposal for a $200,000.00 funding commitment on the part of the City for a new partnership program to create jobs for youth, required that this report be forwarded directly to the Strategic Policies and Priorities Committee in order that the request could form part of City Council's overall budget deliberations this week. Mayor Lastman's office consulted with Councillor Jakobek (Budget Chair) who is in agreement with the need to forward this request through the Strategic Policies and Priorities Committee.

This report provides an initial report on the outcomes of the Mayor's Youth Employment Summit: Count Me In. A more detailed report will be prepared within the next month and forwarded through the Community and Neighbourhood Services Committee of Council.

Comments:

As outlined in the previous report, the purpose of the Summit was to bring together the key stakeholders required to deal with the issue of youth unemployment and to develop real strategies to employ the youth of our City. A total of 150 people participated in the Summit. The participants represented Toronto's corporate, government, labour, education and community agency sectors and included a number of youth. The Summit's success was due to the support it received from the community agency sector, who assisted with both the planning of the event and the volunteer support required on the day of the Summit. On behalf of all City staff I would like to extend our thanks to all those who helped in making this Summit a reality.

The agenda for the Summit divided the day into three key sessions (refer to Appendix 1). The first session was dedicated to four keynote speakers, who included: David Crane (Economic Editor for the Toronto Star); Bob Richardson (Senior Vice-President - Angus Reid); Charles Beer (Executive Director of Ontario Association of Youth Employment Centres) and Tracey Lloyd (Director - Alternative Youth Centre for Employment). The speakers covered a wide range of issues including: the underlying economic condition that has contributed to the current youth employment situation; a demographic overview of youth in the City; and the current services available to support the youth. Each speaker articulated the challenges that need to be addressed if the problem of youth employment is to be solved.

The second session of the day focussed on the "Stories" of current and past programs/initiatives that met the challenges, and resulted in a number of inspiring success stories. CITY-TV sponsored this segment of the Summit, which incorporated both video clips of people as well as interviews with participants who were present at the Summit. The stories approached the issue of youth employment from a variety of perspectives, including those of youth, sponsoring agencies, business and government.

The passion and sincerity of the Stories inspired the third and final segment of the Summit, which required that participants break into small groups and develop strategies to address one of three key challenges: becoming job ready, getting and keeping a job, and creating job opportunities. A wide range of strategies were developed by each of the 15 groups. The majority of these strategies focussed on addressing the challenges faced by "at-risk" youth.

The Mayor's Commitments:

The Mayor spoke at the opening of the Summit and also provided the closing remarks, which emphasized both his commitment to at-risk youth and outlined immediate steps required to begin to address youth unemployment. In his opening remarks the Mayor recommended that the role of the Council appointed Child Advocate be "officially" broadened to include the youth portfolio. Councillor Chow accepted this challenge and it should be recognized that her work program for the Children's Action committee currently contains a work stream dedicated to Youth issues. However, by expanding this role, various interest groups will now have a single contact point around child and youth issues.

The Mayor also acknowledged the challenges facing youth in the City, referencing a number of statistics of which one of the most revealing is the 17.6% unemployment rate for youth between the ages of 15-24. It is based on this reality that the Mayor felt most compelled to issue his first challenge to the Summit participants and the City in general.

The Mayor agreed to bring forward a request to City Council this week to commit $200,000.00 in 1998, to launch a pilot program that will result in at-risk youth getting permanent jobs. Human Resources Development Canada and the Ministry of Education and Training each agreed to come forward with $400,000.00 to support this new City initiative. This will result in a total public sector commitment of $1,000,000.00. The Mayor challenged the Corporate sector to meet or exceed the $1,000,000.00 commitment and agreed to pursue this matter. The City, Federal and Provincial funding are contingent on matching funds from the Corporate sector. The basic focus of the program is to provide youth with four months of on the job experience (at minimum wage), the cost of which would be fully subsidized by the program. Two challenges were directed at the corporate sector. The first was to provide matching funds for the program. The second was to get business to commit to training the youth for the four month period and then providing the youth with a permanent job. Agencies will be critical partners in this program as they will assist in screening applicants identifying, placements and assisting with follow-up. The Mayor stressed the importance of monitoring these next steps and assessing this pilot initiative.

The response to the Mayor's challenge was positive. Representatives from the Federal and Provincial levels of government, Mr. Temple Harris from the Toronto Construction Association, Mr. Dennis Kucherawy from Famous Players, Mr. Don McCreesh from CIBC and Ms. Susan Pigott of St. Christopher Neighbourhood House, all spoke in strong support of this program as well as the need to follow-up on other initiatives developed as part of the Summit. The Mayor agreed to review all of the strategies developed at the Summit and consider further action on this issue.

Conclusions:

The Mayor's Youth Employment Summit was the first step in a three-year commitment to this issue. The proposed pilot program will result in youth getting job experience and an opportunity to participate in the work force. As noted above, a large number of highly innovative strategies were discussed at the Summit and these will be reflected in a further report to City Council.

Contact Name:

Ann-Marie Nasr (392-0402)

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Appendix 1 "Mayor's Youth Employment Summit Agenda", referred to in the foregoing report, was forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its special meeting of April 28, 1998, and a copy thereof is on file in the office of the City Clerk.

8

Child Nutrition Programs: Partnerships in Funding

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following report (April 27, 1998) from the Commissioner of Community and Neighbourhoods Services, addressed to the Budget Committee:

Purpose:

This report describes the cost sharing partnership for child nutrition programs as requested by the Budget Committee.

Source of Funds:

Funding for the Child Nutrition Programs will be provided by the municipality (through the 1998 operating budget of the Public Health unit) with matching contributions being provided by the private sector, the provincial government, school boards and parents.

Recommendations:

It is recommended that Council strongly urge the provincial government to match the Toronto municipal allocation of $1.185 million in order to ensure adequate child nutrition programs with total direct funding of $4.939 million.

Background:

At its meeting on March 24, 1998, the Board of Health endorsed the report "Child Nutrition Programs in the New City of Toronto" and recommended that $1,185,480.00 be allocated to provide municipal core funding for existing child nutrition programs in the city.

On March 28, 1998, the Budget Committee requested the Commissioner of Community and Neighbourhoods Services to report back on the funding commitments to cost-sharing of the child nutrition programs.

Comments:

A review of funding for existing child nutrition programs in both community and school sites across the new city of Toronto shows that programs have been funded through a combination of community partnerships involving parents, provincial government, school boards and the private sector.

In the former City of Toronto, the funding partnership was supplemented by municipal contributions from both Public Health and the Board of Education. This stable funding base resulted in strong overall program coordination, ongoing support and training programs for local staff, and improved nutritional quality of food. This core funding also strengthened the volunteer base and resulted in increased parental contributions.

1998 Funding Partnerships:

The following funding is expected in 1998:

Parents, Fundraising and Private Sector - $2,500,000.00:

Parental contributions across all former municipalities were approximately $750,000.00 in 1997. Based on experience during the past two years and the current contribution rate, we are confident that this projected level of parental funding will be achievable in 1998.

The private sector, in combination with local school community fundraising, contributed approximately $750,000.00 in 1997. We are confident that this level of private sector funding will be maintained or exceeded. A contribution of $50,000.00 was received on April 20, 1998 from the Royal Bank, which challenged others in the corporate sector to follow this lead.

Provincial Government:

Funding has not yet been committed. Without substantial support from the provincial government, the municipal funding allocation is not sufficient to expand our existing child nutrition programs to five days a week from their current 1-3 day operations. In 1997, approximately $700,000.00 in provincial funding was given to programs across the city. This was not adequate to ensure that nutritious food was available to all programs on a daily basis.

At its April 15th meeting, the Children's Action Committee recommended to the Community and Neighbourhoods Services Committee that: The Mayor and the Children's Advocate, together with representatives from the Board of Health and the Toronto school boards, be requested to meet with the Minister of Community and Social Services to seek a matching contribution of $1.2 million from the Province for the continuation of the children's nutrition program. Any shortfall in the provincial contribution would require further fund-raising from parents and the private sector, which will be difficult to achieve. Staff in the Mayor's Office are currently attempting to secure an appointment with the Minister of Community and Social Services.

School Boards:

Currently 209 child nutrition programs are operating in school and community sites across the city. Nineteen of these are under the auspices of the Toronto Catholic District School Board. The two major Toronto school boards have committed $1,143,000.00 of in-kind contributions to programs within their jurisdictions:

(i) The Toronto District School Board has committed $1,041,000.00 of in-kind contributions, including space, utilities, maintenance, caretaking, food delivery and administrative support; and

(ii) the Toronto Catholic District School Board has committed $102,000.00 of in-kind

contributions including space, utilities, maintenance, caretaking and administrative support.

Proposed Mechanism for Allocation of Funds:

Health and school board representatives have set up a Steering Committee to develop an administrative structure that would include the following:

(i) A Steering Committee comprised of management from Toronto District School Board, Toronto Catholic District School Board and Public Health will meet at least bi-annually to make policy decisions and finalize funding allocations to community and school-based child nutrition programs, based on an equity / needs based formula and specific program standards.

(ii) The Toronto Community Partners for Child Nutrition, comprised of foundations representing the two school boards, public health and representatives from Area Program Networks, will make recommendations to Steering Committee regarding policies, funding criteria and formula and funding allocations, coordinate citywide implementation, and ensure matched funding, program monitoring and evaluation.

(iii) Area Program Networks comprised of representatives from local program districts will implement local programs and coordinate local training, volunteers, local participation and fundraising.

(iv) Non-profit foundations will hold funds in trust prior to allocation. On an interim basis, an existing non-profit foundation, the Foundation for Advancement of Community Education (FACE, which is affiliated with the former East York Board of Education), has agreed to undertake this function for the Toronto District School Board pending the establishment of a city-wide foundation.

Conclusions:

Total direct funding required to ensure adequate child nutrition programs totals $4.939 million. The municipal allocation of $1,185,480.00 will be matched by $2,500,000.00 from parents, local fundraising and the private sector, and $1,143,000.00 of in-kind contributions from Toronto District and Toronto Catholic District School Boards.

To ensure sustainable child nutrition programs across Toronto, $1.185 million in provincial funding is required. To date, no commitment has been made by the provincial government to support these initiatives. It is recommended that Council urge the Province of Ontario to commit the necessary funding to enable the development of high quality child nutrition programs in Toronto.

Contact Names:

Dr. Sheela V. Basrur, Medical Officer of Health, Tel: 392-7402, Fax: 392-0713 .



9

Toronto Transit Commission Five-Year Capital

Subsidy Agreement - Prepayment of Subsidy

in Exchange for Release

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) the adoption of the report (April 20, 1998) from the Chief Financial Officer and Treasurer; and

(2) that the City and the Toronto Transit Commission enter into a surviving agreement that requires the City to match the provincial funding over the life of the agreement and permits the City the flexibility contemplated in the report (April 20, 1998) from the Chief Financial Officer and Treasurer.

Background:

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

(a) Report (April 20, 1998) from the Chief Financial Officer and Treasurer regarding prepayment of all remaining Provincial subsidy obligations under the TTC Five-year Capital Subsidy Agreement;

(b) Communication (April 9, 1998) from the General Secretary, Toronto Transit Commission forwarding Toronto Transit Commission Report No. 1 dated April 8, 1998, regarding the Provincial/Municipal/TTC Capital Subsidy Agreement;

(c) Communication (March 31, 1998) from the Minister of Transportation regarding the cancellation of the TTC Capital Subsidy Agreement; and

(d) Communication (April 17, 1998) from the General Secretary, Toronto Transit Commission regarding the five-year TTC/Provincial/Municipal Capital Subsidy Agreement.

The following Members of Council appeared before the Budget Committee in connection with the foregoing matter:

- Councillor Howard Moscoe, Chair, Toronto Transit Commission; and

- Councillor Rob Davis, Vice Chair, Toronto Transit Commission

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(Report dated April 20, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To arrange for the discounted prepayment of all remaining Provincial subsidy obligations under the TTC Five-year Capital Subsidy Agreement.

Funding Sources, Financial Implications and Impact Statement:

Prepayment of the subsidy into an interest bearing capital reserve fund is designed to have no financial impact on the City. The release of the Province from the Capital Subsidy Agreement and the prepayment of all outstanding subsidies under the agreement in no way alleviates the fiscal difficulties arising from the elimination of capital subsidies for transit purposes. At an estimated impact of $180 million per year, the subsidy loss is the single largest budget pressure the City has ever faced. The Budget Committee has requested a report in September 1998 outlining a strategy to address this issue, which is also discussed in a separate report to this Committee on a proposed capital financing management plan.

Recommendations:

It is recommended that:

(i) in exchange for prepayment to the City by the Province of an amount of $828,200,100.00 adjusted as necessary for changes in the prevailing interest rates and any undue delays in the receipt of payment:

(a) the City, TTC and the Province execute a mutual release from the Five-year Capital Subsidy Agreement;

(b) a by-law be introduced to create two interest bearing Reserve Funds entitled "The TTC Capital Subsidy Reserve Fund" and "The Sheppard Subway Project Capital Reserve Fund" to be established with the proceeds of the prepayment, to be expended solely for the purposes of funding TTC capital projects in accordance with the subsidy assumptions in the 1998 capital program;

(c) the TTC report entitled "Provincial/Municipal/TTC Capital Subsidy Agreement" be received for information; and

(ii) appropriate staff be authorized to undertake any necessary actions to implement these initiatives.

Council Reference/Background:

On September 25, 1996, Metro Council authorized the execution of a five-year tripartite capital subsidy agreement with the Ministry of Transportation and the Toronto Transit Commission . The agreement set the terms for continued capital subsidy for the completion of the Sheppard Subway project and other TTC capital works through to the year 2000. The agreement was executed on October 5, 1996.

Discussion:

The Five-year Capital Subsidy Agreement (CSA) was instrumental in the decision of Metro Council to complete the Sheppard Subway project. The agreement provided assurances that subsidies for the project and the rest of the TTC capital program would continue, at least through to the year 2000. Shortly afterward the Province announced that it was discontinuing transit subsidies across the Province as of January 1, 1998, confirming the benefit of the agreement, but leaving the City exposed to the full downloading impact culminating in 2001.

(A) Potential Benefits of Prepayment:

The Province's proposal, as suggested by the attached correspondence from the Minister of Transportation, is to prepay all outstanding subsidies provided by the agreement, presumably for the purposes of reducing the Ministry's administration costs. As long as the payment is sufficient to fund the remaining subsidies obligations, the proposal has the following benefits:

(i) Guaranteed Receipt of Subsidy - under the CSA, subsidy availability is subject to the Legislature allocating adequate funding to the Ministry of Transportation. Therefore, the risk exists that we would not receive the full subsidy as set out in the agreement.

(ii) Administrative simplicity - the release as proposed in this report reduces the need to process and account for subsidy claims to the Province, eliminates uncertainty about cash flow of subsidies due to payment processing delays and ineligibility rulings, and eliminates the opportunity for Provincial intervention into purchasing decisions through subsidy eligibility restrictions.

(iii) Financial flexibility - the reserve funds, as proposed in this report, would provide the opportunity to partially defer the use of debt financing for TTC projects, depending on prevailing capital market conditions.

(iv) Potential Financial Gains - under the proposed lump sum prepayment of the subsidy, the City assumes all the benefit and risk associated with gaining an investment return on the funds. The Province has suggested that it could guarantee a rate of return on the funds if they are held by the Ontario Financing Authority and metered out in annual payments to the City, however, such a safeguard is not deemed necessary. An additional benefit of the release is that surplus property used for TTC purposes, previously subject to partial claw back of the proceeds of disposition by the Province of between 16 percent and 75 percent on the grounds that either the purchase or maintenance of the assets had been subsidized, will no longer be subjected to this treatment.

(v) The City Finance Department has reviewed the outstanding subsidies with TTC staff. The assumptions used to derive the net present value of all remaining subsidy payments and the proposed payment of $828.2 million are deemed to be fair and reasonable subject to the following conditions:

(a) changes to the prevailing interest rates at the time of the transfer of the funds or significant delays in the payment after Council approval of the prepayment could result in the need for adjustment to the amount of the payment;

(b) the Province will not impose any expenditure eligibility criteria on the funds; and

(c) there will be no further claw back on the proceeds of future asset sales as described above.

Full prepayment of the discounted value of future subsidy obligations will place all responsibility on the City to plan for full funding of TTC capital expenditures, and to invest the funds in such a way as to ensure that the funds generate a rate of return sufficient to provide a cash flow comparable in value to that the Ministry of Transportation was compelled to provide under the agreement.

(B) The TTC Position:

The TTC has reviewed the proposal and approved execution of a release at the April 8 Commission meeting as described in the accompanying transmittal, subject to certain conditions, such as the funds being set aside in two (one for the Sheppard Subway) separate interest accruing reserve funds. In general, these conditions are consistent with standard financing procedures followed by the City or as proposed in this report.

The TTC report also proposes that the funds be set aside in a trust, to ensure that the funds are used only for TTC purposes as would have been the case under the subsidy agreement. This option has been considered by the City's legal department. In the opinion of the legal department, as supported by Finance, a trust fund is a disadvantageous mechanism for the City to employ, primarily because:

(1) it would transfer beneficial ownership of the funds to the TTC, e.g. surplus returns on investment; and

(2) it would create restrictions on the use of and access to the funds by the City to reduce its financing costs.

Consequently, it is recommended that the TTC report "Provincial /Municipal/TTC Capital Subsidy Agreement" be received for information.

(C) The Recommendations of this Report:

The release of the Province from future obligations under the Capital Subsidy Agreement should be constructed in such a way as to:

(1) terminate all obligations under the capital subsidy agreement;

(2) provide for a lump sum payment from the Province of Ontario of $828.2 million or the equivalent adjusted for changes in interest rates and undue delays in payment; and

(3) terminate any rights of the Ministry to audit TTC capital expenditures, claw back subsidy payments, or claim any portion of proceeds from sale of TTC assets or assets used for TTC purposes.

In order to safeguard the funds for their intended purpose and protect fiscal integrity of the City, it is recommended that two interest accruing reserve funds (one for the Sheppard Subway Project) be set up for TTC capital financing purposes only and that the proceeds from the release be contributed to such reserve upon receipt. Normal budget procedures and Council by-laws are sufficient to guide the use of these funds until they are fully depleted. If the funds are placed in a reserve fund as recommended in this report, a motion in Council to reopen the enabling by-law would require a majority before use of the funds for any other purpose could be considered.

The release of the Province from the Capital Subsidy Agreement and the prepayment of all outstanding subsidies under the agreement in no way alleviates the fiscal difficulties arising from the elimination of capital subsidies for transit purposes. At an estimated impact of $180 million per year, the subsidy loss is the single largest budget pressure the City has ever faced. Staff have been asked to report back to the Budget Committee in September on a fiscal strategy to address the elimination of the TTC capital subsidy, which is also discussed in a separate report to this Committee on a proposed capital financing management plan.

Conclusion:

The proposal from the Province to prepay all future TTC capital subsidies required under the capital subsidy agreement in exchange for release from the agreement has certain policy, administrative and financial advantages for the City. Subject to approval of this report, two interest accruing reserve funds will be set up so that the funds will be available when required to finance budgeted TTC capital expenditures.

Contact Name:

Rob Hatton, telephone: 392-9149, fax: 392-3649, Interim Budget Lead, Urban Environment and Development Committee, Internet: robert_hatton@metrodesk.metrotor.on.ca.

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(Communication dated April 9, 1998, addressed to the

City Clerk from

the General Secretary, Toronto Transit Commission)

At its meeting on Wednesday, April 8, 1998, the Commission considered the attached report entitled, "Provincial/Municipal/TTC Capital Subsidy Agreement."

The Commission amended Condition #1 and #5 noted on page 3 of the report to read as follows:

(1) two reserve funds or trust funds (if it can be accommodated without any adverse tax implications) be established - one for the Sheppard Subway project and one for the Commission's base capital program; and

(5) new projects not included in Schedule A of the 1998-2002 Capital Budget will require specific Commission and Council approval.

The Commission then approved the following:

(1) the execution of an agreement to release the Province from the Provincial/Municipal/TTC Capital Subsidy Agreement in consideration of their prepaying their obligation under the agreement, subject to the conditions set out in this report, as amended.

(2) that this report be forwarded through the City Urban Environment and Development Committee to City of Toronto Council for approval.

The Commission also requested that when staff reply back to the Minister regarding the

release that the letter include reference to the fact that the Province does not have unilateral power to cancel the contract.

The foregoing is forwarded to the City of Toronto Council for approval.

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(Toronto Transit Commission Report No. 1

dated April 8, 1998)

Recommendation:

It is recommended that the Commission approve:

(1) the execution of an agreement to release the Province from the Provincial/Municipal/TTC Capital Subsidy Agreement in consideration of their prepaying their obligation under the agreement, subject to the conditions set out in this report; and

(2) that this report be forwarded (through the appropriate standing committees) to the City of Toronto for approval.

Funding:

If the proposed financial settlement of $828.2 million offered by the Province is properly protected in reserve funds and is appropriately invested to obtain a return at least equal to the discount factor applied by the Province, there should be no impact on the capital program for either the City of Toronto or the TTC from a funding perspective.

Background:

On June 6, 1996, the Minister of Transportation announced wide-ranging changes to Provincial subsidy for transit projects including dropping traditional funding from 75 percent Provincial share to 50 percent for transit capital projects and disallowing certain overhead costs previously charged against the TTC capital program. A copy of the announcement is attached. Subsequently, TTC, Metro and Provincial staff met to work out the details of an agreement to provide flexibility and security of capital funding to the TTC. This resulted in a five year Provincial/Municipal/TTC Capital Subsidy Agreement which was approved by the Commission on September 17, 1996, and by Metro Council on September 25,1996.

The Capital Subsidy Agreement (CSA) agreement provides for provincial funding of $511 million for the Sheppard Subway project and $915 million for the Commission's base capital program for the years 1996-2000 (contingent upon matching funding from Metro - now the City of Toronto). The CSA reflects Provincial subsidy eligibility rules and rates (reduced from 75 percent to 50 percent) and it includes various capital envelopes (groupings of like projects) and provides for benchmarking of projects or components of projects (eg. overheads). Other key features of the agreement include:

(1) The establishment of a credit account to permit money saved on a project to be re-invested in other transit projects and to allow timing differences in cash flow on an individual project to be recognized.

(2) Allowance for the carry forward of unspent capital funds to future years.

(3) Immediate Provincial project approval for all items set out in Schedule A of the agreement.

It was anticipated that these features would provide the Commission with the flexibility to better manage and deliver its Capital Program through the recognition of the Commission's long-term capital needs as defined and prioritized in the capital program.

Discussion:

In a letter dated March 31, 1998, to the Mayor of the City of Toronto and the Chair of the TTC (copy attached), the Minister of Transportation advised that the Province intends to make a one-time payment of $828,200,100.00 to discharge its responsibilities flowing from the Provincial/Municipal/TTC Capital Subsidy Agreement. The $828.2 million payment represents the discounted value of payments not yet received under the CSA and will be made in exchange for a full release, signed by the TTC and the City of Toronto, of any future claims under the agreement. City of Toronto staff are currently reviewing the discount factors (based on Provincial bond zero coupon curves), however, it is believed that they are reasonable.

Staff from both the TTC and the City have met with representatives of the Province to discuss the details of this announcement. While it is understood that the Provincial proposal is not intended to place the Commission at any disadvantage compared to the current arrangement, the proposed settlement is being made without any Provincial conditions other than the requirement that a release be signed before any monies are paid. While the Province wishes to prepay its obligations and withdraw from any future involvement in municipal transit matters, the principles of the Capital Subsidy Agreement (noted above) must continue in force under the agreement between the Commission and the City of Toronto. This can be facilitated through the establishment of reserve funds for the $828.2 million, with the following conditions:

(1) two reserve funds should be established - one for the Sheppard Subway project and one for the Commission's base capital program,

(2) joint approval from both the TTC and the City will be required to draw funds from the reserve accounts and the City of Toronto will be required to provide matching funds. This approval would be provided through the annual budget process and will include an updated Schedule A to the agreement. The current version of Schedule A is as approved by the Commission along with the 1998-2002 Capital Program at its meeting of November 18, 1997, (see copy attached). This Schedule A must be updated to reflect 1997 actuals, the slippage of bus deliveries from 1998 into 1999 and, the proposed reallocation of future bus purchase funds to a subway car purchase order to replace the H2 subway cars.

(3) since the Province's one-time payout covers their obligation discounted, the funds in reserve must be in income earning investment vehicles and the earnings must accrue to the fund in order to ensure sufficient funds are available for the Commission's capital program, and

(4) any underruns, cost savings or slippages must remain in the funds,

(5) new projects will require specific Commission and Council approval,

(6) additional contributions to the reserves should be accepted (eg. through the sale of surplus assets).

In addition to the foregoing, based on discussions with Provincial staff, the following conditions should be included in the release agreement:

(1) there will be no further Provincial capital subsidy compliance audits (post-1996),

(2) there will be no future Provincial recapture or clawback of funds received from the sale/disposition of assets,

(3) the Province will no longer establish municipal transit policies.

Once the Commission and City of Toronto Council approve the Province's proposed settlement, TTC and City legal staff will meet to develop appropriate documentation to conclude a release agreement in exchange for the $828.2 million.

Justification:

The TTC's Capital Program represents the Commission's prioritized needs. Long-term, comprehensive, reinvestment plans and multi-year budgets are included based on life-cycle replacement programs, implementation of necessary safety improvements and the need to overcome the effects of previously deferred maintenance/investment. The Province and Metro Council recognized the Commission's needs through the provision of $915 million under the Capital Subsidy Agreement for the base capital program. In order to ensure that the Commission's requirements can be met, it is essential that the $828.2 million settlement be set aside and utilized only for the Commission's capital program to ensure that the transit system is restored and maintained in a state of good repair.

--------

The following material referred to in the transmittal letter dated April 21, 1998, from the Budget Committee, was forwarded to all Members of Council and copies thereof are on file in the office of the City Clerk:

- (March 31, 1998) communication from the Minister of Transportation regarding the cancellation of the TTC Capital Subsidy Agreement;

- Appendix 5 entitled, "Proposed Updated Schedule "A" - TTC 1996 Actual/1998-2002 Capital Program Budget (000's) for Presentation to the Commission on November 18, 1997;

- communication (April 17, 1998) from the General Secretary, Toronto Transit Commission regarding the five-year TTC/Provincial/Municipal Capital Subsidy Agreement."; and

- (June 6, 1996) communication from the former Minister of Transportation, addressed to the Chairman of the former Municipality of Metropolitan Toronto.



10

Provincial Downloading - Updated Estimates

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) the adoption of the report (April 17, 1998) from the Chief Financial Officer and Treasurer; and

(2) that the Chief Financial Officer and Treasurer communicate with the Province prior to April 24, 1998, as to what her estimate is of the residential tax room and how the figures were determined.

The Budget Committee on April 20, 1998, had before it a report (April 17, 1998) from the Chief Financial Officer and Treasurer regarding an update of the financial impact of provincial downloading initiatives on the 1998 Operating Budget.

--------

(Report dated April 17, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

This report provides an update of the financial impact of Provincial downloading initiatives on the 1998 Operating Budget.

Funding Sources, Financial Implications and Impact Statement:

The budget impact of Provincial downloading, based on the latest estimates, has been reduced by $32.3 million from the December 12, 1997 amount of $163.5 million to $131.2 million. $22.9 million is already reflected in the 1998 Budget, therefore, the remaining budget reduction totals $9.4 million to various program areas (as noted in the recommendations). The details of the Provincial calculation of the Residential Education Tax Room is to be confirmed and may have a negative impact on the budget in the approximate amount of $16 million.

Recommendations:

Approve adjustments to the 1998 Operating Budget for the following programs:

Net Change ($ Millions)

Program Increase (Decrease)

Hostels (3.1)

Income & Skills Support (1.9)

Children's Services (1.7)

Housing 1.1

Property Assessment (3.8)

Net Adjustment (9.4)

Council Reference/Background/History:

N/A.

Discussion:

Province-Wide Impact:

In May of 1997, the Province announced details on the financial impact of its "Who Does What" proposals. Service and funding responsibilities totalling $3 billion will be downloaded to Ontario's 815 municipalities in exchange for the Province's assumption of $2.5 billion in residential education taxes. In addition, the Province eliminated municipal support grants totalling $665 million. The Province announced that the swap in service responsibilities would be revenue neutral for municipalities.

City of Toronto Impact:

Under the original downloading proposal, the new City of Toronto stood to come up $375 million short. On August 6, 1997, the Province decided to pool the cost of Welfare, Social Housing, Ambulance Services, Child Care and Public Health across the Greater Toronto Area. This shifted more of the financial impact to the 905-areas and reduced the impact on Toronto to $84.4 million. On October 6, 1997, the Education Tax Room amount changed and the net impact on Toronto was reduced to $65.9 million.

On December 12, 1997, the Province modified the pooling equation by eliminating Public Health, Child Care and Land Ambulance services from the pooled services and increasing Toronto's share of GO Transit costs. As a result, Toronto's shortfall increased from $65.9 million to $163.5 million. Adjusting for the known base amounts in the City's budget, the net financial impact, currently reflected in the 1998 Budget, is $140.6 million.

On April 3, 1998, the Province provided a further update to the numbers. The latest downloading estimates totalled $157.1 million. Adjusting for the known base amounts in the 1998 Budget, the resultant net impact on the budget is $131.2 million.

Based on a formula provided by the Province, a preliminary calculation reveals that Toronto's share of the Residential Education Tax Room could potentially be revised downward to $557.4 million, and will have a negative impact of approximately $16 million on the 1998 Budget which would revise the net downloading impact to $147.2 million.

The potential tax room allocation for Toronto is less than the 50 percent share (47 percent or $30 million less) of total residential education taxes needed to offset the new downloaded costs. The exchange of service responsibilities is not revenue neutral, with the shortfall in residential education tax room a major factor behind the additional downloaded costs faced by Toronto . The revised tax room calculation or confirmation of the previous amount has yet to be clarified by the Province.

Minor adjustments to various program areas result in a $9.4 million net reduction and relate to changes to Provincial cost sharing and further fine-tuning of the estimates:

Hostels Reduce by $3.1 million

Income Skills & Support Reduce by $1.9 million

Children's Services Reduce by $1.7 million

Housing Increase by $1.1 million

Property Assessment Reduce by $3.8 million

Net Adjustment Reduction of $9.4 million

A complete history and updated impact of Provincial downloading is summarized in Appendix A.

Implications:

Several concerns over the downloading of services for the new City of Toronto have been identified and continues to be monitored. Specifically, there are many additional costs that are not included in the downloading estimates:

(i) Transition costs for Social Services, Child Care and Social Housing are estimated at $11.2 million and, at this time, are required in 1998.

(ii) Administrative costs of Social Housing is expected to be $10.0 million on an annualized basis. Although the timing of this impact is not known, it is probably not a 1998 issue.

(iii) Capital provisions in the restructuring funds for transit, housing and water & sewer may not be adequate to support future requirements.

Capital deficiencies related to Social Housing were previously estimated at $260 million over five years, with the majority of the deficiencies related to Ontario Housing Corporation assets. The actual budget impact continues to be identified and refined.

The capital subsidy loss for the Toronto Transit Commission will reach $180 million per year by the year 2001. This impact has not been recognized by the Province as a direct downloading cost due to the timing of its announcement and its deferred impact.

(iv) Some programs now mandated by the Province (e.g. Daycare, Housing, Public Health), were previously discretionary and now will be 100 percent municipally funded and are not all considered part of the GTA pooling.

Access to Provincial Funds:

The Province has set up a series of funds worth about $900 million to help municipalities cope with some of the downloaded costs. Originally, Toronto was not eligible to access these funds since the Province assumed the City had a larger tax assessment base and had more room to find efficiency savings.

However, the Province has indicated that $53.3 million may be allocated to Toronto from the Municipal Capital and Operating Restructuring Fund. This one-time funding may be available to provide for capital projects under the Transportation Program. This may provide the City with some additional flexibility in the Capital Program. Further clarification is being sought from the Province.

Conclusions:

With the changing roles and responsibilities driven by Provincial legislation, the nature of the business of local government has been dramatically re-defined. Provincial downloading has placed significant financial pressures on Toronto's operating and capital budgets, for 1998 and beyond.

In the 1998 operating budget, Toronto has identified offsets to its own internal budget pressures primarily through restructuring and efficiency savings. Although the updated estimates of Provincial downloaded costs are lower than originally expected, the City must still address remaining operating budget pressures of $117.6 million.

Remaining 1998 budget pressures (as at April 3, 1998) $127.0 million

Additional program adjustments:

(Hostels, Income & Skills Support, Children's Services, Housing

Property Assessment) ($9.4 million)

Remaining 1998 budget pressures (as at April 20, 1998) $117.6 million *

* (These pressures could change, pending clarification of the Province's calculation of the Residential Education Tax Room:)

Options to address the remaining budget pressures have been outlined in a separate report to Budget Committee.

Contact Name:

Shekhar Prasad, 392-8095

--------

Appendix A

Provincial Estimate of Downloaded Costs

New City of Toronto

($ Millions)



Service/Program
Oct. 6/97

Estimate

Dec. 12/97

Estimate

Apr 3/98

Update

Per 1998

Budget



Adjusted*
Social Assistance 128.7 133.3 128.3 133.3 128.3
Child Care 4.7 10.6 8.9 10.6 8.9
Public Health 22.4 38.2 38.2 39.9 39.9
Ambulance 15 30.1 33.2 29.4 29.4
Social Housing 269.3 265.5 266.6 265.5 266.6
Children's Aid Society -21.9 -23.8 -23.8 -25.1 -25.1
GO Transit 16.8 53.1 53.1 53.1 53.1
Transit - Operating 110.1 110.1 110.1 95.9 95.9
Provincial Offences - Net Revenue

-8.5

-8.5

-8.5

-5.0

-5.0

Libraries 4.2 0 0 0 0
Property Assessment 28.5 28.5 24.7 28.5 24.7
Gross Receipts Tax 20.1 20.1 20.0 13.2 13.2

Total

589.4 657.2 650.8 639.3 629.9
Residential Education Tax Room

-603.1

-573.2

-573.2

-573.2

-573.2**

Net Change in City Costs -13.7 84.0 77.6 66.1 56.7
Municipal Support Grant Eliminated

79.6

79.5

79.5

74.5

74.5

Net Additional Costs

65.9 163.5 157.1 140.6 131.2


* Latest Provincial estimate has been adjusted to reflect known budget base amounts for Public Health, Ambulance, Children's Aid, Transit and Gross Receipts Tax. Provincial Offences Net Revenue adjusted for part-year impact in 1998.

** Residential Education Tax Room calculation to be confirmed by the Province.

11

Previously Approved but Unstarted Capital Projects Further Report

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the disposition of previously approved capital projects that were funded but not yet started.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To recommend the disposition of previously approved capital projects that were funded but not yet started

Financial Implications:

For those projects which are being recommended for deletion and for which funding has been provided, the funds of $506 thousand can be applied to reduce the 1998 Capital Budget program borrowing level, currently recommended by the Budget Committee at $123 million (excluding Rapid Transit Expansion and rate supported programs).

Recommendations:

It is recommended that:

(1) the projects indicated with a 'C' in Appendix A and B of this report be deleted;

(2) the current funding of $46 thousand from tax supported projects so identified in Recommendation No. (1) above be used to reduce the 1998 Capital Budget borrowing requirement;

(3) the debenture authorizations be cancelled for projects so identified in Recommendation No. (1) above;

(4) the projects indicated with a 'D' in Appendix A and B of this report be deferred for consideration with the 1999-2003 Capital Budget;

(5) the current funding of $460 thousand from tax supported projects so identified in Recommendation No. (3) above be used to reduce the 1998 Capital Budget borrowing requirement; and

(6) the balance of the projects be deemed to be started in 1998, be incorporated into the final 1998 Capital Budget, be referred to the respective service areas for further monitoring and be reported on a quarterly basis.

Council Reference:

At its meeting of January 26, 1998, the Budget Committee had before it a report (January 20, 1998) from the Chief Financial Officer and Treasurer entitled "1998 Capital Works Program - Preliminary Targets". In considering that report, the Committee requested the Chief Financial Officer and Treasurer to respond to several motions regarding capital expenditures including a request for a report concerning unstarted capital projects. At its meeting of March 30, 1998, the Budget Committee had before it a report (March 30, 1998) from the Chief Financial Officer and Treasurer entitled "Previously Approved But Unstarted Capital Projects". The Committee reviewed the enclosed list of such projects and recommended that a further report be provided that indicated, for each project, whether it could be cancelled, deferred or proceed in 1998.

Discussion:

Appendix A and B contain the lists of previously approved tax and rate supported projects, respectively, which for a variety of reasons have not yet incurred any commitments. After discussions with the respective service areas, the disposition of these projects was determined as follows: (I) a 'C' beside a project means that it can be cancelled and the funds used to reduce borrowing, and (ii) a 'D' beside a project means that the project can be deferred for consideration in the 1999-2003 Capital Budget and any allocated funding can be reapplied against future borrowing. For all the other projects on the lists, staff of the respective service areas advise that the projects will be proceeding in 1998.

Conclusions:

The quantum of funding which can be applied to the 1998 Capital Program by cancelling and deferring previously authorized but unstarted projects is $506,000.00.

Contact Name:

Len Brittain, 392-5380; Fax: 392-3649; Internet: len_s._brittain@metrodesk.metrotor.on.ca



12

Establishment of City Reserves and Reserve Funds

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the establishment of City Reserves and Reserve Funds.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

The purpose of this report is to approve the consolidation and establishment of reserves and reserve funds for the new City of Toronto as of January 1, 1998.

Funding Sources, Financial Implications and Impact Statement:

Funding for the City reserves and reserve funds to be established is provided from the reserves and reserve funds of the seven municipalities amalgamated as of January 1, 1998. Amounts which are identified in this report are preliminary at this time pending finalization of the 1997 accounts in each municipality.

Recommendations:

It is recommended that:

(1) Reserves and reserve funds in the amount of $915,445,484.00 be established and consolidated where appropriate as listed in Schedule I; and

(2) That a further report on the adequacy of each reserve and reserve fund established be brought back as soon as possible after an analysis of projected inflows and outflows is complete.

(3) Staff be directed to prepare a bylaw giving effect to the consolidation or continuance of reserve funds included in this report.

Council Reference / Background / History:

The amalgamation of seven Toronto municipalities, as of January 1, 1998, results in the accumulation of reserves and reserve funds previously established for a variety of purposes. In some cases, the use of a reserve fund has been restricted by legislation or agreement with a third party. In many cases the use of the reserve or reserve funds was at the discretion of Council. Where reserves or reserve funds have been established for similar purposes, it is appropriate to consolidate these into a single reserve or reserve fund upon amalgamation.

Schedule I attached to this report groups the reserves and reserve funds as of January 1, 1998 for consolidation purposes and provides preliminary balances pending the finalization and audit of the 1997 accounts. Part A of this schedule identifies those reserves and reserve funds which are discretionary, which can be used for other purposes as Council may approve and which relate to tax supported funding, either in the form of the tax mill rate or user fees. Part B groups those reserve funds which are funded from user fees but which are restricted as to use by the Development Charges Act, the Planning Act, or agreements with third parties. Part C groups those reserves and reserve funds which are rate supported by water and parking operations.

Discussion:

The rationale for the establishment of reserves and reserve funds included in this report is described below.

Working Capital Reserve:

A working capital reserve is intended to ensure adequate resources are available to cover net operating expenditures. This is of particular concern at the start of a year when operating cash flows are negative. In 1998, there was a negative operating cash flow of approximately $200 million in January.

Employee Related Reserve Funds:

  • Workers' Compensation Reserve Fund.
  • Employee / Retiree Benefit Reserve Fund.
  • Sick Leave Reserve Fund.
  • Workforce Reduction Reserve Fund.


Four reserve funds are required for funding obligations to the municipal workforce. A study is being done to quantify these obligations.

Productivity Improvement Reserve Fund:

A Productivity Improvement Reserve Fund is recommended to provide the initial funding on projects which are expected to generate long term savings from productivity improvements. The annual savings generated from approved projects would be used to replenish the initial funding and would include a component for interest.

Insurance Reserve Fund:

An Insurance Reserve Fund is required to fund various insurance claims and related adjusting and legal expenses. The balance available in the Insurance Reserve Fund is necessary to cover future payouts on losses which have occurred and includes any payment below deductible limits or above coverage levels.

Vehicle and Equipment Replacement Reserve:

A vehicle and equipment replacement reserve is required for the funding of vehicle and equipment purchases. This reserve helps to ensure funding is available when vehicles and equipment require replacement and eliminates the need to absorb large expenditures in the operating budget in the year of replacement.

Capital Financing Reserve Fund:

A Capital Financing Reserve Fund is recommended to provide financing on capital projects that would otherwise be financed through the issuance of debentures.

Land Acquisition Reserve Fund:

A Land Acquisition Reserve Fund is proposed to accumulate proceeds from the sale of land and density. This reserve fund would be available to help finance the purchase of new properties or could be used for other purposes as Council may direct.

Solid Waste Management Perpetual Care Reserve Fund:

A reserve fund for the long term obligations associated with the closure of landfill sites is required.

Waste Management Reserve:

A Waste Management Reserve is proposed for funding the net current and capital expenditures of solid waste disposal.

Winter Control Stabilization Reserve:

A winter control stabilization reserve is recommended to help fund winter control expenditures in years when such expenditures exceed amounts budgeted. This reserve would be funded from winter control accounts in years of under-expenditure and would help to stabilize the impact of adverse weather on the mill rate.

Building Maintenance Reserve Fund:

A Building Maintenance Reserve Fund is recommended for the consolidation of various reserves and reserve funds originally established for the preservation and major repairs of municipal buildings.

City Parking Reserve Fund:

A City Parking Reserve Fund is required for municipal parking operations. The Municipal Act requires that a reserve fund be established for the net revenue from the operation of all parking facilities operated on or behalf of the City but allows Council to use the funds for other (non-parking) purposes after payment of debenture debt charges and capital expenditures for additional parking lots or facilities.

Parking Payment In Lieu Reserve Fund:

A Parking Payment In Lieu Reserve Fund is required to accumulate those parking charges levied under provisions of the Planning Act. Similar to the City Parking Reserve Fund, Council may choose to use funds collected under the Planning Act for purposes other than parking.

Election Reserve Fund:

An Election Reserve Fund is recommended for the funding of municipal elections. Annual funding provisions for municipal elections to this reserve fund eliminates the impact of large expenditures for this activity in election years and helps to stabilize the mill rate.

Contingency Reserve:

A contingency reserve is proposed for the estimated costs of arbitrations and awards established by the former municipalities.

Reserves for Program Surplus Allocation:

Three reserves were previously established by the Metropolitan Toronto Corporation for the allocation of surplus in specific program areas. It is recommended that these reserves be continued.



Other Discretionary Reserves and Reserve Funds:

Each of the former municipalities have also established reserves and reserve funds for specific programs or facilities. It is proposed that these reserves and reserve funds be continued during this transition phase of amalgamation.

Parkland Acquisition Reserve Fund:

The Planning Act provides that payments may be required from developers in lieu of a conveyance of land for parks purposes. The Act restricts the use of these funds to parks or other public recreational purposes and requires that monies collected be maintained in a separate account. The need to establish a new City wide Parkland Acquisition Reserve Fund as of January 1, 1998 and the need to separately distinguish the December 31, 1997 balances by former municipality is being addressed in a separate report to the Budget Committee.

Development Charges Reserve Funds:

Reserve funds are required under the Development Charges Act for development charges which are applied and collected pursuant to various municipal bylaws. The charges fund the cost of infrastructure and are restricted under the Act to those uses and geographic areas for which they were raised.

Scarborough Capital Levy Reserve Fund:

A Capital Levy Reserve Fund is recommended for funding capital projects previously approved by Scarborough City Council. Funding of these capital projects in Scarborough has usually been in the year of expenditure rather than the year of the levy.

Subdividers' Deposits Reserve Fund:

A reserve fund is required for deposits received from subdividers and developers in respect of obligations for the construction of various infrastructure.

Restricted by Agreements with Third Parties:

Various reserve funds are required for funding obligations arising through third party agreements.

Donated Funds Designated for Specific Purposes:

Similar to reserve funds, which are established in response to third party agreements, four reserve funds are required for donated monies which are designated for specific projects or programs.



Temporary Reserve Funds:

Three reserve funds are required for the sale of land or density where proceeds received is in the form of a promissory note or a mortgage loan. As the note and loans mature and cash is received, funds will be allocated to the Land Acquisition Reserve Fund and these temporary reserve funds will be discontinued.

Water Rate Stabilization Reserve:

A reserve is required to provide funding for the stabilization of water rates. The reserve helps to reduce the impact of unusual increases in water expenditures and can be applied in the rationalization and implementation of a water rate structure that is uniform throughout the City.

Water and Sewer Capital Expenditure Reserve Fund:

A reserve fund for capital expenditures is recommended to provide funding for watermains, storm and sanitary sewers and water pollution control equipment and facilities. The availability of these reserve funds provides a capability to undertake major infrastructure initiatives without an adverse impact on the water rate.

Parking Authority Capital Expenditure Reserve Fund:

A reserve fund is required for reserve funds of the Parking Authority. Similar to the City Parking Reserve Fund, the Authority can apply any balance available in this reserve fund for the acquisition or improvement of additional parking lots or facilities.

The Municipal Act provides that council may enact a bylaw to apply discretionary reserve monies to a purpose other than that for which the fund was established. A bylaw will be prepared and submitted to Council giving effect to the consolidation and continuance of reserve funds included in this report.

Conclusions:

N/A

Contact Name:

Ken Colley, 416 395-6715.

Shekhar Prasad, 416 392-8095.

13

Association of Municipalities of Ontario -

Payment of 1998 Membership Fee

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) that its previous decision on April 3, 1998, that the City's contribution to the Association of Municipalities of Ontario be equivalent to the amount paid by the former Municipality of Metropolitan Toronto in 1997, be rescinded;

(2) the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer; and

(3) that AMO membership fees in future years be based on the same assessment used for all other cities.

Background:

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

(a) report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the payment of Association of Municipalities of Ontario 1998 Membership Fee; and

(b) memorandum (April 16, 1998) from Councillor Joan King regarding City of Toronto support for municipal organizations.

The following Members of Council appeared before the Budget Committee in connection with the foregoing matter:

- Councillor Joan King, Seneca Heights; and

- Councillor Howard Moscoe, North York Spadina.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To obtain approval for payment of Association of Municipalities of Ontario 1998 membership fee.

Financial Implication:

Funds are provided in the Sundry at Large Account - Corporate Expenditures.

Recommendations:

That the Chief Financial Officer & Treasurer be authorized to pay 1998 membership for the Association of Municipalities of Ontario in the amount of $68,532.33 in accordance with the stated formula for 1998 AMO membership fees as contained in Appendix C.

Discussion:

The Budget Committee, at its meeting of April 3, 1998, recommended to restrict the amount of 1998 AMO membership fees paid by the City of Toronto to the amount paid by the former Metro in 1997. The fee paid by Metro in 1997 amounted to $14,139.25. Appendix A details the membership fees paid in 1997 by the former municipalities. In 1997 the Councils of the former Cities of North York and Scarborough did not approve payment of AMO membership fees. The combined fees billed in 1997 for all seven municipalities was $99,604.67. The combined fees paid in 1997 for five of the seven former municipalities was $66,060.99. Previously the area municipalities were billed under the fee schedule for lower tier municipalities while Metro was billed as an upper tier municipality. If the standard membership fee structure, for a separate City as per Appendix C, was used for the City of Toronto, membership fees for 1998 would have been $68,532.33 based on the 928,039 household reported by Metro in the 1996 Annual Financial Report.

AMO has billed the City for 1998 fees in the amount of $106,498.80, which is not based on households as in previous years, but rather on the amount of property tax paid by AMO. The attached document from AMO, Appendix B, details the reasons why AMO proposes not to invoice the City using the same fee structure as other Ontario municipalities. As the letter indicates, the payment for the City would be reduced if the actual amount of property taxes paid by AMO is less than estimated.

Contact:

Al Shultz, 416 397-5240, Finance Department.

--------

Appendix A

City Of Toronto

Schedule Of Amo Membership Fees

Billed In 1997


Municipality Fee Paid 1997

$



$
East York 8,263.24
Etobicoke 12,390.12
York 8,902.51
Toronto 22,365.87
Metro 14,139.25 66,060.99
Municipality Fee Not Paid

$



$
Scarborough 15,702.59
North York 17,841.09 33,543.68
Total Fee Billed 99,604.67
NOTE: NORTH YORK FIGURE IS FROM 1996 FEES


(Memorandum dated April 16, 1998, addressed to the

Budget Committee from Councillor Joan King)

Historically, the fee for membership to the Federation of Canadian Municipalities (F.C.M.) was paid by the former Metro government whereas the fee for membership to the Association of Municipalities of Ontario (A.M.O.) was shared by the former local municipalities and the former Metro. The staff report dated September 8, 1997 indicated the following fee structure:

$ $

Association 1997 Actual 1998 Estimate

Association of Municipalities

of Ontario (A.M.O.) 14,139.00 100,000.00

Federation of Canadian

Municipalities (F.C.M.) 116,000.00 116,000.00

International Union of

Local Authorities (I.U.L.A.) 7,700.00 7,700.00

World Association of Major

Metropolises (W.A.M.M.) 40,000.00 F.F. 42,000.00 F.F.

(9,768.00 Cdn)

The Budget Committee recommended that the AMO fee be reduced to $14,000.00 (the amount paid by Metro in 1997).

Why should the City support AMO?:

AMO is an effective lobbying voice bringing the municipal perspective to the Provincial government. In January 1997, for example, the Province announced new responsibilities for municipalities including 100 percent of the cost of social housing and 50 percent of the cost of social assistance and long-term care. AMO, with tremendous support from its members, exerted considerable pressure and the Province decided to remove financial responsibility for long-term care (nursing homes) from the property tax base and to reduce the municipal share of social assistance costs from 50 percent to 20 percent. Without these changes, the financial impact would have been significantly greater (i.e. 100 percent funding on long-term care in Toronto would break us). AMO was able to convince the Province to retreat from its "Megaweek" announcements and further has pushed the government for additional financial assistance amounting to $30 million.

On February 6, 1998, at a special meeting of AMO's membership, significant changes were made to the Association's structure and operations. The City of Toronto will appoint 7 members to the Board of AMO and will have the opportunity to have strong input into AMO's policy and to influence government thinking.

One of the key changes approved by the membership in February, was to give the Association clear authority for the Executive and the Board to respond promptly to the Province on municipal affairs. Currently, AMO has Task Forces which will be meeting with the appropriate ministers to bring municipal concerns to their attention. Many Toronto staff and Councillors are working on these Task Forces.

(i) Municipal Act Task Force

(ii) Referendum Act Task Force

(iii) Restructuring of Ontario Hydro Task Force

(iv) RCO Roles and Responsibilities Report Task Force

(v) Social Housing Reform Task Force

As a result of the massive transfer of responsibility, it is critical that the Provinces' actions are evaluated and monitored. AMO is doing this and the City's involvement is important.

It is essential that Municipalities in Ontario have a strong collective voice and that the City of Toronto take a leadership role on the Board of AMO.

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The Strategic Policies and Priorities Committee also had before it the following material, which have been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its special meeting on April 28, 1998, and copies thereof are also on file in the office of the City Clerk:

- Appendices B and C, appended to the report dated April 16, 1998, from the Chief Financial Officer and Treasurer

- Communication (September 8, 1997) from Ms. Aggie Patterson, Supervisor of Administration, Clerk's Department, addressed to Mr. Ivan Araujo, Manager, Corporate Accounting.

14

Summary of Deputations on 1998 Capital and Operating Budgets

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) as previously recommended, the funding requests for the Cedarvale and McCormick Recreation Centres and the Eatonville Library be considered in the context of the five-year Capital Plan and a report be submitted to the Budget Committee no later than October 1998;

(2) the grant requests for Serena Toronto and the Toronto Arts Council be referred to the Municipal Grants Review Committee; and

(3) all other issues referred to the report (April 17, 1998) from the Chief Financial Officer and Treasurer be received.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 17, 1998) from the Chief Financial Officer and Treasurer summarizing the budgetary implications of responses from deputants to the Committee of the Whole of Council held on April 14 and 15, 1998.

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(Report dated April 17, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To summarize the budgetary implications of responses from deputants to the Committee of the Whole of Council held on April 14 and 15, 1998 for consideration of the Budget Committee.

Financial Implications:

Any funding changes made as a result of the information in this report would affect the 1998 Operating and Capital Budgets, respectively, as recommended by the Budget Committee at its meeting of March 31 and April 2 and 3, 1998.

Recommendations:

It is recommended that the Budget Committee consider the specific funding issues raised by deputants as contained in this report and make recommendations to Council through the Strategic Policies and Priorities Committee as it deems appropriate.

Council Reference:

During its special meeting of April 14 and 15, 1998, Council heard from deputants with respect to the 1998 Capital and Operating Budgets. Both budgets are scheduled to be before Council for formal debate at its meeting scheduled for April 28, 1998.

Discussion:

The Attachment to this report contains a brief synopsis of the issues raised by each of the deputants and an indication of the resolution or disposition of those issues in the context of the budgets as currently recommended by the Budget Committee. Specific funding recommendations made by the deputants and relevant background for the consideration of the Budget Committee is summarized below.

(1) Day Care Issues:

The primary issue raised by the deputants with respect to child care issues is the re-investment of a $12 million "windfall" received by the former Metro back into the child care program. As well, certain deputants wished to expand the number of day care spaces by the filling of 2,000 vacancies, and expressed concern over the pressures facing the child care program, e.g. pay equity costs and the fact that per diems costs paid to operators had not been increased over the past several years.

During 1997, as a result of the Provincial change to Regulation 262, the former Metro received unanticipated financial relief totalling approximately $14 million. The Province would contribute a greater proportion of the child care program costs by virtue of the fact that Metro was now able to retain 100 percent of user fees (as opposed to having the user fees shared 80 percent:20 percent with the Province, as was previously the case). However, the Regulation also required that the City must maintain the number of subsidized fee spaces at 24,216.

As part of the 1997 Operating Budget process, approximately half of the $14 million was applied immediately to child care and used to fund some child care expansion in the Ontario Works program, to establish a child care capital reserve of $1 million, and to eliminate the arbitrary minimum user fee of $1.00 per day per child. While the balance was used to address budget pressures on the mill rate, Council nevertheless "reserved" $7.43 million within the 1997 Corporate Contingency Account for possible child care uses later in the year. In fact, in September, Council approved a strategy to use these monies, which focused on one-time assistance to operators and providers of subsidized child care to provide help with program expenses and costs associated with property operators.

The 1998 funding for child care, as recommended by the Budget Committee, maintains the 1997 service levels and the number of child care spaces at the required 24,216.

(2) Request for Recreational Facilities:

(a) Cedarvale Recreational Centre

(b) McCormick Recreational Centre

Mr. Kalevar addressed City Council advising of his petition from over 1,000 residents in support of building a recreation centre in Cedarvale Park. It was also suggested that at a minimum, a clubhouse and washrooms should be provided for local residents.

The recommended 1998 Parks and Recreation Capital Budget does not include any funding for the this project nor has this project been identified in future year projections. The Budget committee has recommended that the Cedarvale Recreation Centre be referred for consideration with the Parks and Recreation five-year capital works programme to be developed by September 1998.

Toronto Community Council, at its meeting of March 27, 1998, recommended that $350,000.00 for the design work for McCormick Recreation Centre be accelerated to 1998. The Budget Committee has recommended that the McCormick Recreation Centre project be referred for consideration with the Parks and Recreation five- year capital works programme requested for Budget Committee's consideration in September 1998.

(3) Transportation / Cycling / Environment Issues:

The primary issues raised in the above areas include that Council re-consider the $30 million request for the demolition of the east end of the Gardiner Expressway and the capital budget reduction of $500,000.00 for High Occupancy Volume lanes be re-instated in the 1998 Capital Budget.

Other issues expressed through the deputation process relate primarily to review of transportation systems and policies, which may not have immediate budget implications but which will require future consideration. Some specific concerns / issues raised include:

(i) introduction of toll roads for main highways;

(ii) improvement to Public Transit;

(iii) expansion of bike paths in the City;

(iv) ensure pedestrian safety issues (ie sidewalk users, cyclist safety) are addressed through better education, improved signage;

(iv) consider environmentally friendly alternatives in developing policies (ie promote walking, cycling, use of transit); and

(v) support demonstrated for Toronto Atmospheric Fund's arm's length relationship with the City.

(4) Public Health Services:

In summary, the majority of the deputants, commended the Budget Committee for not reducing Public Health services in 1998; and for expanding the Healthy Births, Healthy Parenting and School Food programs.

The Budget Committee was requested to recommend that Community Health Grants be maintained at 1997 levels; and, that future budgets maintain the current level of Health Services - the programs/ services specifically mentioned were:

(i) Dental Care for low income seniors

(ii) High Risk Pregnant Women

(iii) Mental illness

(iv) Disease & other prevention programs

(v) Child nutrition

(vi) Aids and Sexual Health

(vii) Needle exchange

(viii) Enforcement of Food Regulations & Inspections

(viv) Wellness promotion

Grant to Serena Toronto - ($5,000.00) - Recommended Reduction Proposal:

One of the deputants requested re-instatement of $3.5 thousand for Serena Toronto. Reduction proposal # 14 recommends that the $5,000.00 grant paid to Serena Toronto be discontinued in 1998. The grant was paid in-lieu of counselling services offered with respect to natural child births. Public Health staff have taken the position that this service is an enhancement to the counselling services already provided in-house and therefore brought it forward as a reduction proposal which could be supported.

(5) Animal Services:

The issues raised included:

(i) Giving the Toronto Humane Society Business Plan proposal fair consideration

(ii) Maintaining the status quo ie. in York and East York and allow for community input

(iii) Supporting an independent 3rd party review of animal services delivery in Toronto

(iv) No contracting out of services - maintain in-house

(v) Do not allow for one provider of shelter services

(vi) Revisit policy respecting the (former) City of Toronto Park Patrol Service ($181,000.00)

The Animal Services 1998 Recommended Budget provides the necessary funds to maintain the status quo with respect to the operations of its animal shelters and the full year's funding for the Toronto Humane Society Contract.

The issues noted above should be deferred for consideration with the independent report requested of the Chief Administrative Officer which will be reviewing animal services across the entire City.

(6) Housing:

The primary issue raised by the deputants who spoke in support of the Housing program was the preservation of public housing (including maintaining service and funding levels), and the opposition to any sale/privatization of social housing units (a Provincial issue with respect to the potential privatization of 7,000 units). The deputants also requested that tenants be included in all decision-making processes.

The 1998 recommended budget for the Housing Program maintains services at the 1997 levels. Any recommended reductions have resulted from efficiencies (implementation of best practices, elimination of duplication upon amalgamation, restructuring), and are therefore not expected to impact operations.

(7) Cultural Grant to Toronto Arts Council:

In keeping with the general understanding that the grants' programs for the City of Toronto will be maintained at the 1997 level, the 1998 grant level to the Toronto Arts Council, as recommended in the operating budget, for both the administration and the cultural grant component of the Cultural grants have been sustained at the 1997 level.

The Toronto Arts Council will assume the responsibility for providing grants to individual artists throughout the new City of Toronto. The TAC is requesting an additional requirement of $250,000.00 to provide the same service levels to individual artists throughout the new City of Toronto, beyond its former boundaries.

The issue of service levels must be determined in context with both priorities of the New City of Toronto and funding availability. The Municipal Grants Review Committee is in the process of reviewing current policies and practices of the former municipalities, in order to implement common principles for the municipal grants policies. In addition, given the current corporate pressures it is premature to allocate any additional funding.

It is therefore recommended that the TAC in consultation with appropriate City officials, review the issue of service levelling of grants to individual artists and report its findings to the Municipal Grants Review Committee and the Budget Committee, in September, prior to the commencement of the 1999 operating budget.

(8) Property Tax Issues:

The deputants expressed their common concern respecting the impact of assessment reform and tax policy changes on the residential and commercial property classes. The points raised included favouring a tax freeze for all homeowners, repealing the Current Value Assessment (CVA) system, and creating new property classes to avoid significant shifts in taxes. Several deputants indicated their support of tax rebates for charitable organizations, and property tax relief for seniors.

An Assessment and Tax Policy Task Force has been established and is currently considering various tax policy options available to the City to deal with the tax impacts resulting from assessment reform. These options include the phase-in of increases and decreases, tax relief for low-income seniors and low-income disabled persons, tax rebates for charitable and similar organizations, as well as the recently introduced option of capping tax increases to 2.5 percent for the commercial, industrial, and commercial-residential property classes, and creation of new sub-classes of property.

Conclusions:

The deputants that appeared in front of the Committee of the Whole of Council on April 14 and 15, 1998 made a number of specific recommendations with respect to the 1998 Capital and Operating Budgets. Budget Committee will debate these items at its meeting on April 20, 1998 and will make recommendations as it deems appropriate for the formal Council debate on the budgets scheduled for April 28, 1998.

Contact Name:

Shekhar Prasad, 392-8095

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April 14, 1998 Appendix

Name Issue Resolution/Disposition
2:00 - 3:00 p.m.
1 Eric Greenspoon

President, Noise Watch, Toronto

Noise pollution/noise by-law enforcement. 1997 City level would mean $2.7million new City-wide Funding consistent with 1997 level. Matters of policy Service Level is an issue for Corporation as a whole.
2 Susan Serran, Co-Chair, Arts Vote Steering Comm., Toronto Supports separate Culture Div., arms-length arts grants; flat line cultural grants Grants sustained at 1997 level. The TAC who has responsibility of delivery grants, does have an arms length agreement with the city.
3 Norman Seagram, Chair, Board of Directors, Harbourfront, Toronto No risk, no art-no life . Does not want grants cut below last year's level. Grants sustained at 1997 level.



4 Angela Lee, Freelance Artist, Toronto Maintain and build on the arts budget Grants flat-lined
5 Martha J. Durdin, Board Member, Council for Business and the Arts in Canada, Toronto Maintain current level of support for the arts. Grants flat-lined

6 Stephanie Lundy & Livine Solomon, Grade 11 Arts Advantage Media Class, Downsview Secondary School, Downsview Without the arts our world could be as blank as the inside of a cardboard box. Grants flat-lined.
7 Paul Gross, Actor, Toronto Protect the long standing support of Metro and the previous City of Toronto to the Arts. Grants flat lined.
8 Spyros Volonakis, Chair, Child Care Advisory Committee, Toronto Pressure on Child Care Centres because of Provincial actions and freezing of the per diem rates by the former Metro. Wants $12 million put into contingency for child care purpose. $12 million was a one time windfall in 1997 and most of that money was made available to the day care community in 1997 and is not available in 1998.
9 William Doyle-Marshall, Toronto In support of Carribana Festival. Dealt at Council Meeting of April 16, 1998.
3:00 - 4:00 p.m.
10 Cheryl MacDonald, Toronto Coalition for Better Child Care, Toronto Wants 2000 vacant day care spaces to be filled. Wants savings in Social Assistance to be used for child care. Wants $12 million raised from user fees to be used for this purpose. The user fee revenue is being used for Child Care purpose to maintain the same number of spaces and same level of city funding as last year.
11 Steve Ellis, Toronto Establish an office of assessment review board to help the provincial assessment office understand the problems.
12 Manny Drukier, Vice-President, Avenue Road Davenport Business Association, Toronto Wants an advisory committee comprised of previous mayors to be setup to look at devolution of process and cut back on infrastructure spending . Funding maintained at a level that maintains service levels pending review of restructuring and alternative service delivery options.
13 Oudit Raghubir, Scarborough Concerned about day care centres in schools and lack of funding for pay equity pressures and low level for the per diem.
14 Christine Taylor, Director, Kensington Day care Centre, Toronto Per diem fees should be raised to cover real cost of day care. Wants the $12 million to be used for reinvestment in day care . There is no $12 million available to be used towards the pressures identified.
15 Ms. Virginia Thompson, Junction Day Care, Toronto Make all budget meetings open to the public. Allow deputants at all budget meetings. Wants the City to take the provincial loan and grant and make available any available funds to the needy programs. Budget meetings are public meetings, and there is a process for deputants.
16 Ms. Karen Wirsig, Metro Network for Social Justice, Toronto Absent
17 Dr. Marian Joppe, Chair, Heritage Toronto, Toronto Value of volunteer sector pegged at $40 million. Do not sacrifice heritage. Find ways to help the volunteer sector. Heritage issues continues to be a priority for the City.
18 Ms. Elizabeth Ingolfsrud, Chair, Etobicoke Historical Board, Toronto Absent
19 Mr. Joe Gill, Chair, The Friends of Fort York, Toronto Absent
20 Mr. Tim Burns, St. Lawrence Neighbourhood Association, Toronto Supports no increase in user fees for the Community Centres. User fees maintained at last year's level.
4:00 - 5:00 p.m.
21 Mr. Dale Ritch, Toronto In favour of a tax freeze for all homeowners.

How much extra money is the City getting from the removal of the business occupancy tax?

Use the 1997 assessment roll and mill rate to create the 1998 tax bills.

Reject CVA.

22 Mr. Basil Mustafa, Cross-Cultural Communication Centre, Toronto Stop funding cuts for anti-racism work.

Statistics indicate that racism is on the increase.

Need funding more than ever before, because in the year 2000, 54% of Toronto residents will be racial minorities.

23 Ms. Salome Lukas, Women Working with Immigrant Women, Toronto Concerned that programs for women and women of colour are being eliminated.

Concerned that access and equity to services is a right.

Grant programs sustained at 1997 levels.
24 Mr. Jim D'Orazio, Board Member, Metro Toronto Sewer and Watermain Contractors Association, Mississauga Concerned with the standardization of service contracts.

Private industry supports the standardization of service contracts.

Recommendation: Use of ADR processes (equitable dispute resolution);

Use of best practices based on national and international standards.

To be forwarded to the Engineering Working Group within Works and Transportation for consideration as a new standardized contract is being developed for the new City.
25 Ms. Ann Fitzpatrick, Public Housing Fight Back, Toronto Wants the preservation of public housing stock.

Support no sale of social housing.

Recommend Province stop its plan to sell off housing and scatter units.

Hold the Province to their promise to audit the social housing stock and to bring them up to a certain standard.

26 Mr. Vance Latchford, Toronto Concerned with the private management model for social housing.

Qualifications of the Management companies is uneven and therefore, the quality of services is uneven. We have a greater need for service in this area.

Council to endorse a communication mechanism to include tenants in decision making.

Communicate to the Province Council's displeasure with their housing policy to privatize the 7000 additional housing units, which according to the speaker. We will end up with contracts which tenants have no control.

27 Mr. Cliff Martin, Toronto Community activist on public housing.

Budget include: front line staff for support programs ie recreation.

Include limited pay support for tenants that fall behind in their rent.

Does not want user fees for youth programs, etc.

User fees maintained at last years' level.
28 Ms. Julia McNally, Toronto Housing crisis in Toronto.

Increase in waiting lists, homeless people.

Federal gov't downloading to province to municipal.

Solid investment in housing is better than homelessness.

Listen to the tenants in the process of reform.

Provide adequate funds for housing.

Independent audit of social housing.

Maintain frontline services.

Ensure any savings from budget cuts to be put back into housing program.

Oppose the sale of public housing and oppose the privatization of 7000 housing units.

Grants have been sustained at 1997 level.
29 Mr. Michael Opera, Toronto Toronto Property Tax freeze.

Wants mayor to keep election promise for all ratepayers on tax freeze.

City to send out tax bills on 1997 assessment and mill rates.

Deduct any shortfall from education portion we are giving the province.

30 Mr. John Phillips Toronto Absent
31 Mr. Millie Wallace, Toronto Absent
5:00 - 6:00 p.m.
32 Ms. Amanda Platt, Toronto Absent
33 Ms. Maria Martella, Toronto Upper Yonge Village - family owned businesses.

Seeking separate tax class for small businesses.

Concerned with increase of taxes of 2.5% for three years and then uncertainty after that for the development of their business plans.

34 Mr. Martin Ahermaa, Martin Ahermaa Editorial Services, Toronto Toronto Public Library system

Library should not have budget cuts or user fees.

All budget reductions and standardization of user fees were recommended by the Library Board, who confirmed that these measures do not result in any negative impact on service levels.
35 Mr. Rhona Swarbrick, Protect Established Neighbourhoods, Etobicoke Absent
36 Mr. John Banka, Environmentalists Plan Transportation, Toronto Review and audit Wheeltrans and apply the savings to Wheeltrans budget before applying to TTC deficit.
37 Ms. Natalie Litwin, Transportation 2000, Toronto Urban cars produce most emission.

Do not build any more parking garages and charge more for parking.

Spend more on public transit.

Rescind former City of Toronto by law which requires theatres to provide parking.

38 Mr. Ian Wheal, Toronto Field Naturalists, Toronto Absent
39 Ms. Peg Lush, Feet on the Street, Toronto Support the furthering of rights, safety and health of sidewalk users.
40 Mr. Bill Brown, Pedestrian Issues Committee Personally will receive assessment reduction relating to Metro Traffic policy.

$500,000 shortfall city subsidy to people who drive their cars.

Stop financing auto--review traffic policies. Support public transit.

41 Ms. Andrea Rutty, Toronto Absent
42 Ms. Joan Doiron, Toronto Spoke to Toronto's wealth. Wealth in cities decline as people use more cars. Promote public transit and increase the city's wealth. Decrease people's use of cars.

Use budget to realize Official Plan objectives. Stop road widening. Stop subsidy to cars. Promote walking and cycling. Increase car parking fees, no new parking facilities. No subsidy to Island Airport.

6:00 - 6:30 p.m.
43 Ms. Anne Collins, President, Toronto Arts Council, Toronto City should hold the line on grants budget to give organizations some stability in difficult times. NO increase in their administration budget.

Would like to top up their grants budget by $250,000.

1,900 more artists would apply from outside the former City of Toronto boundaries. Without top up can't deal with extra demand.

The $250,000 is not included in the recommended budget because it would be an increase to the base funding given to TAC in 1997.
44 Ms. Elizabeth Cinello, Toronto Artist - Speak to $250,000 top up. Former City of York. Would appreciate access to $250,000 top up in grant.
45 Ms. Wendy Lilly, Toronto Artist-Former City of Etobicoke. Would appreciate access to this $250,000 top up in grant.
46 Ms. Jill McLean, Woodgreen Community Centre, Toronto Single parent- Day care subsidies and student loans. Day care considers OSAP as income but not student loan. She now has to pay back the student loan with interest plus still paying day care.
47 Mr. Colin Hughes Chairperson, Metro Campaign 2000, Toronto To end child poverty.

Eliminate users fees for recreation programs.

Maintain community grants.

Reinvest savings from decrease in welfare rolls to child care.

Set aside 2.5 M to extend healthy babies program.

Preventive services levelled up.

Designated child's levy or fund to support children's programs.

8:00 - 9:00 p.m.
48 Ms. Joan Wood, Toronto Absent
49 Mr. Mike Moraites, Toronto Absent
50 Ms. Kathy Stephenson, Community Member, Woodgreen Community Centre, Toronto concern regarding funding cut to

Centre

Same level of funding as in 1997. Part of Facilities Budget.
51 Ms. Elma Stephenson, Toronto concern related to funding cut to Woodgreen Centre



52 Mr. Howard Tessler, Federation of Metro Toronto Tenants Foundation, Toronto spokesperson on behalf of deputant.

telephone program - increased usage.

continue funding at last years' level.

$50 thousand - hotline, website, court action monitoring.

purchase of service

funding not purchase of services related to tenant issues to be referred to grant committee

53 Ms. Gail Hawkins, Toronto Toronto Humane Society -proposal should be given proper and fair review.
54 Mr. Richard Griffith, Toronto Food Policy Council, Agincourt Food Policy - continue grant Grant maintained at last year's level.
55 Mr. Simon Cheng, Chinese Interagency Network of Greater Toronto, Toronto CIN commend Council for not reducing services in 1997/98.

1998 maintain health related programs, especially related to low income seniors for dental care, food programs (grant from food council), for high risk pregnant women, seniors, and the mentally ill.

Sustain grant at last years' level.

56 Ms. Colleen Gray, Pape Adolescent Resources Centre, Toronto 10 - 19 years of age, provide child programs otherwise not provided from other groups.

- description of Youth and Care

grants funded at last years' level.
57 Ms. Dorothy Fletcher, Older Women's Network, Toronto S. Waters speaker.

concern with provincial government download. Subsidized housing: requirements exceed the availability of housing.

Tenant Landlord Act: difficulty paying for rent.

Continue to provide funds for non-profit housing. Seek clarification from the province as to the outcome of the Rental Act on those who are on fixed income.

58 Ms. Marsha Watts, East End Community Health Centre, Toronto Absent
9:00 - 10:00 p.m.
59 Mr. Brian Mayes, Serve Canada, Toronto Serve Canada - youth support.

sustain grant to organization.

60 Mr. Alvin Curling, MPP for Scarborough North Absent
61 Mr. Brian Laurence, Toronto
62 Terry Venturino, Toronto Toronto Humane Society - no further funding request.

Discussed proposal. Independent third party review.

contract maintained as existed in 1997.

Budget Committee recommending review.

63 Mr. Ian Stuart, Etobicoke Humane Society, Toronto Barb Tate

adopt Budget Committee recommendation, sustain York and East York to allow for community input.

Committee adopt Board of Health budget, savings should be taken from seasonal parks control program for former city of Toronto.

64 Ms. Ainslie Willock, Canadian Alliance for Furbearing Animal, Toronto How the City will handle complaints related to animals.

Provider: mistake that the THS could handle sheltering for all. Should not reduce the providers to one - single provider.

adopt Budget Committee recommendation - sustain York/East York in 1998

revised budget be maintained at $4 million, seasonal parks program specific to former city of Toronto







recommendation in budget

consistent with recommendation in budget

65 Mr. Ron Monteigh, St. Lawrence Community Recreation Centre Advisory Council Does not want user fees.
66 Mr. Chai Kalevar, Chair, Arlington Middle School Advisory Council and Students from Arlington Middle School York - need for a recreation centre.

$58 million for parks & recreation, seeking percentage to implement centre in Cedarville Park.

minimum club house with washroom.

Budget Committee recommended that the request for a Recreation Centre be referred for consideration with the Parks and Recreation five year Capital Works Program.
67 Ms. Linda Pitney, Canadian Coalition Against Fraud, Toronto Absent
68 Mr. Jim Tsaparis, Municipal Citizen Alliance, Toronto review user fee solution, including no fee increase for one year.
69 Mr. Bruno Racovaz, Toronto Absent
69a Mr. Ross

Snetsinger

Environment Planning Transportation

Give priority to environmentally friendly alternatives.

Encourage people to leave cars at home.

Don't wide the roads to increase road capacity.

Improve TTC and GO service.

Encourage business to use rail to move goods.

Plan transportation system.

69b Mr. Amish Wilson Collect monies for Sheppard subway construction and put money into reserve fund for TTC to borrow.

Better to stop or delay Sheppard subway rather than starve the existing structure.

Toll roads - 427, DVP, etc.

Set higher tax rates for parking lots.

Lower tax rate for vacant space.

69c Ms. Zena Onan Promote and design effectively for pedestrian safety.
69d Mr. Paul Clifford, President of Hotels Association Tourism will continue to be successful by maintaining services.

Union supports Olympic bid.

Dependent on high quality of day care.

No users fees for recreation programs.

Support Senior's programs.

Maintain funding for housing. No privatization, no selling of units.

Increase community grants.

Public transit - no fare increase or service decrease.

Support fair wage program.

Support additional $150,000 for Carribana.

Support hotel room levy.

Support full funding of Tourism Toronto.

69 e Gary Dawson

Consider amount of funding going directly to programs, not administration. Spend tax dollars towards programs. Look at alternative methods to fund programs, rather than tax dollars, eg Corporate funding, transfer of Federal funding directly to City, not through province..
69 f Michael Kerr City should recognize impact of cuts. spoke on the roundhouse Project


April 15, 1998

Name Issue Resolution/Disposition
9:30 - 9:50 p.m.
70. Mr. Lee Zaslofsky, Queen West Community Health Centre, Toronto Citizens for Public Health.

Thankful that budget for public health not gutted. Thank Council for modest cuts in administration but not in programming areas.

Challenge is to come up with public health vision for next century i.e. disease prevention wellness promotion.

71. Ms. Debbie Field, Citizens for Public Health, Toronto Support the modest expansion in public health budget.

Continue to allow citizen participation on Board of Health.

Continue to enforce food regulation and inspection.

Cautious about cuts to senior mgmt. and administration.

TAP fund- preserve it.

Have direct grants to programs.

72. Mr. Tony Silipo, MPP for Dovercourt, Deputy Leader, NDP, Toronto Absent.
73. Ms. Maryanne Bedard, Ferncliff Day Care, Toronto Why after three years of full enrolment continue to run deficit.

Difference between full fee and subsidized child is $95 a week.

Need more subsidy to continue to provide this service. Not putting the City's resources in the right places.

Direct more resources to areas more highly valued by the people i.e. child care.

74. Ms. Cheryl De Gras, Pat Schultz Child Care Centre, Toronto Under threat under two fronts.

Threat from Province for adult education.

Threat from the lack of filling empty spaces. Return the $12 million to child care budget to help fill the 2,000 spaces.

Early Childhood Education-Humber College (unknown deputant).

Invest in child care so that students in this industry can continue to work in this industry.

10:00 - 11:00 a.m.
75. Mr. Bill Palander, President-Elect, Toronto Real Estate Board, Don Mills Address property tax reform.

Three guiding principles:

(1) Remove uncertainty-people need to know true impact.

(2) Need to identify those at risk.

(3) That benefits and costs are not disproportionate for`any one class.

Creation of new property tax classes could be answer-avoid significant shifts in taxes.

Definition of small business tax classes is important.

Should employ phase-in approach.

Zero tax increases for property homeowners.

Eliminate development fees.

Long term solution for true reform is to use current value for current use rather than speculative value.

76. Ms. Sue Johnston, Co-Ordinator, Orde Daycare, Toronto Absent.
77. Ms. Susan McCrae Vander Voet, (METRAC), Toronto Ask for support in continued funding for METRAC and community partners.
78. Mr. Denis Casey, Acting President, CUPE Local 79, Toronto Represents former City of Toronto and former Metro.

Support Council's goal of maintaining service levels to public.

Staff reductions could jeopardize Council's goals of maintaining service levels--front-line staff replaced by management staff.

Urge Council to recognize the important role of staff.

79. Mr. Okezie Iroaga, Native African Inmates & Families Association, Toronto Before Council votes on budget consider that access and equity is still not available in this community.

Few resources available to assist people from minority groups to integrate in community. Please consider programs that help new comers settle in community.

80. Ms. Cassandra Wong, Director of the Community Development and Social Services Department, University Settlement Recreation Centre, Toronto Absent.
81. Ms. Marg Cox, Metro Association of Family Resource Program, Toronto Service downloaded by Province.

Thank staff in their role for smooth transition.

Family resource programs have a little funding but do a lot of work. In the business of building healthy communities. Ask Council to advocate with the Province to ensure that they pay their fair share for funding support for family resource programs.

82. Ms. Elaine Prescod, Co-Chair, Community Reference Group, Scarborough Recommend and advise that community services and programs not be cut but enhanced.

That budget process be made accessible and that public be informed so that their input is meaningful.

83. Ms. Maureen Boulter, Equally Healthy Kids, Toronto Nutrition programs for children important to learning. Breakfast Clubs help children. Faced decreasing core funding. Used fund raising. In 1998 fund raising goal is $42,000. Adequate and reliable funding is the answer for this child program. Asking Council to support cost sharing model and to fund 24% of the cost of this program.
84. Yan My-Ma and Darleen Wilson, Community Parent, Dundas School Community Breakfast & Lunch Program, Toronto Ask for Council support in funding food program.
85. Ms. Cynthia Dumont, Scarborough Hunger Coalition and Director, Neighbourhood Services West Scarborough Community Centre, Toronto Thank Council for $1.2 million commitment to child nutrition programs.
11:00 - 12:00 p.m.
86. Ms. Cindy Anthony, East York Kids Community Breakfast Club, Toronto Ask for stable funding from a number of partners. Thank Council for commitment of $1.2 million for child nutrition program.
87. Mr. Matthew Knight, Student, Ontario Coalition for Student Nutrition, Toronto Absent.
88. Ms. Fiona Knight, Toronto Community Partners for Children Nutrition, Toronto Ask to enhance and strengthen support so that no child goes hungry in this City. Applaud and congratulate support of $1.2 million.
89. Ms. Carolyn Egan, Sexual Health Network, Toronto Overview of sexual health services provided by new City.

Thank Budget Committee for recommending full funding.

90. Ms. Amina Rawji, Immigrant Women's Health Centre, Toronto Ruby -

Recognize Public Health support in assisting them in running their Drop-in Centres and Health Centres. Continue to fund Public Health and prevention programs.

91. Ms. Hazelle Palmer, Planned Parenthood of Toronto, Toronto Absent.
92. Mr. Michael Battista and Juanita Smith, AIDS Community Group - Key Partners Committee, Toronto Support recommendation of Budget Committee to fund aids and sexual health programs.

Summarized why work is important.

Emphasize importance of continued support for ethno specific groups to allow citizens to access services they need.

93. Mr. Patrick Evans, Gay Men's Educators Network (G-MEN), Toronto Absent.
94. Ms. Jane Cullingworth, Women's Outreach Network, Voices of Positive Women, Toronto Absent.
95. Mr. Greg Robinson, AIDS Action Now, Toronto Absent.
96. Ms. Cheryl White, Harm Reduction Coalition of Ontario - HIV/AIDS Sub-Committee, Toronto Asking for continued support for funding for needle exchange (drug users) and harm reduction program.
12:00 - 12:30 p.m.
97. Mr. Michael Rosenberg, Toronto Concerned that economic development does not produce economic growth. Doing more does not produce more. Over emphasis on investment and capital projects especially technology. Would like to see investment in housing and TTC.
98. Ms. Andrea Bowker, Toronto Co-chair Toronto City Cycling Committee.

Introduce group to Council. Take care of citizen's concerns over cycling. Committee will work on issues relating to all the former cities and expand their mandate.

Emphasized the importance of City staff to their committee.

99. Mr. Crowford Murthy, Etobicoke Metro Separate School Board Rep. on Cycling Committee.

Canbike Course should be available to all citizens. Bike safety education is important.

Need signage on curb lanes.

More education to taxis and buses.

Bike paths need to be maintained.

Extend the bike lanes. This would be traffic calming device.

Bike paths need to be connected (especially the 401) at a lesser cost than building or widening roads. Encourage bike use.

100. Mr. Greg Furlong, Song Cycles, Toronto Business is based on Toronto's continued support and promotion of cycling.
101. Mr. Sean Wheldrake, Don Mills Bicycle safety.

Outlined their goals and programs.

2:00 - 3:00 p.m.
102. Ms. Carol Smith, Coalition for Children & Youth, Scarborough Encourage Council to make children a priority - nutrition, public health, child care, library services, etc. Maintain services at present levels, equalize access across City, add 2,000 spaces, reinvest $ from cuts or fees
103. Mr. Antoni Shelton, Executive Director, Urban Alliance on Race Relations, Toronto Partnership between City and Urban Alliance. Est. t of Toronto Equity Council; more focussed bureaucratic and political structures. Set aside $2m. from existing budget for related activities to Toronto Equity Council.
104. Ms. Karen Mock, National Director, League for Human Rights of B'Nai Brith Canada, Toronto Maintain access and equity programs Grants have been flat-lined; Access and Equity functions (Corporate Services)...........
105. Ms. Farhia Ahmed, Community Worker, Deejinta Beesha, Toronto Somalia Community - preserve resources and reaffirm City's commitment to elimination of barriers. Increase multicultural programs.

106. Mr. Bob Crawford, Executive Director, Spirit of the People, Toronto Aboriginal Community - keep in mind representation of native people in making budget cuts.
107. Ms. Priya Rana, Executive Director, Council of Agencies Serving South Asians, Toronto South Asian Community - Pass by-law to exempt non-profit organizations from tax increases. Phase in increases over several years. Support multicultural grants and access and equity - do not cut these organizations.
108. Mr. Duberlis Ramos, Executive Director, Hispanic Development Council, Toronto Hispanic Community - involve community in decision-making and identification of issues to improve service delivery.
109. Ms Jane Atkey on behalf of Ms. Janice Tait, Representative, Transportation Action Now, Toronto Promotion of universal accessibility and availability of public transit. Increase Wheel-Trans budget, speed up acquisition of low-floor buses, speed up plans for handicapped access to subway stations, specific plan to accommodate those riders who cannot currently utilize Wheel-Trans, feasibility study with respect to fee increase on conventional system to cover shortfalls in Wheel-Trans, issue special licences to taxis for access for disabled.
110. Mr. Keith Wong, Executive Director, Chinese Canadian National Council, Toronto Support for maintaining current existing social services. "Investment in People" should be top priority.
111. Ms. Carol Montagnes, Program Co-Ordinator, Ontario Native Council on Justice, Toronto Absent.
111A Ms. Madeline McDowell, Chair, Humber Heritage Support for maintaining funding for heritage programs.
112. Ms. Judy Prasad, Program Director, Cross Cultural Communication Centre, Toronto Absent.

3:00 - 4:00 p.m.
113. Ms. Karen Baldwin, Program Co-Ordinator, The 519 Victim Assistance Program, Toronto Absent.
114. Mr. M.S. Mwarigha, Project Co-Ordinator, Centre for Equality Rights in Accommodation, Toronto Support for grants to community groups, particularly those involved in the elimination of discrimination in housing, and homelessness initiatives.
115. Mr. Gilmar Militar, Executive Director, Parkdale Intercultural Association, Toronto Support for Parkdale Intercultural Association.
116. Ms. Charmini Peres, Executive Director, Ontario Council of Agencies Serving Immigrants, Toronto Absent.
117. Ms. Rita Kohli, Executive Director, Women in Transition, Toronto Absent.
118. Ms. Margaret Parsons, Executive Director, African Canadian Legal Clinic, Toronto Support for access and equity, and anti-discrimination initiatives. Maintain current level of funding to the Access and Equity Centre. Funding has been recommended at the 1997 level.
119. Mr. Kam Po Tong, on behalf of Ms. Avvy Go, Legal Counsel, Metro Toronto Chinese & Southeast Asian Legal Clinic, Toronto Support for Social and Community Services, particularly maintaining funding for seniors/minorities/ immigrants.
120. Ms. Eileen Morrow, Lobby Co-Ordinator, Ontario Association of Interval and Transition Houses, Toronto Absent.
121. Mr. Carmel Hili, Toronto Christian Resource Centre, Toronto Support for community and social services/programs and agencies. Maintain funding/enhance funding for social programs.
121A Mr. Jack Slibar, Toronto Support of status quo for Toronto Humane Society to the end of 1998. Welcomes the review of what is the best option for the delivery of animal services in Toronto.
121B Mr. Peter Leiss,

New Toronto Civic Employees Union, Local 416

Wishes to be involved in budget process.
122. Ms. Liz White, Animal Alliance of Canada, Toronto Council adopt Public Health budget as recommended by Budget Committee at $4,295.6 thousand. Savings are not to be taken from staffing costs; rather, $181.0 thousand savings to be taken from the budget of the former City of Toronto Park Patrol Service, and the remaining savings to be taken from the Toronto Humane Society contract.

Opposed to contracting out animal services.

122A Ms. Natalie Smith, 416 Drop-In Centre In support of assistance/ housing for persons with mental health issues. In support of public health, particularly as related to mental health issues.
123. Ms. Cheryl McDonald, Parent for Better Beginning, Toronto Absent.
4:00 - 5:00 p.m.
124. Ms. Pat Roblin, Committee on the Status of Women, Toronto Support for day care and homelessness initiatives. Concerned about staff lay-offs, which may disproportionately impact on women.
125. Ms. Rita Luty, Toronto Increase spending on public health to 2% of overall spending.
125A Mr. Dalton Shipway, Task Force to Bring Back the Don Wants vision for lower Don River. Supports dismantling of the eastern portion of the Gardiner Expressway.
126. Mr. George Panagapka, Citizens for Public Health, Toronto Maintain funding for public health, especially the "harm reduction" program (e.g. needle exchange, drug user outreach support).
126A Ms. Helen Smith, Riverdale Community

Seniors'

Centre

In support of funding for seniors' community centres.
127. Ms. Michelle Hewton, Jessie's Centre for Teens, Toronto Absent.
128. Mr. Sam Lewkowicz, Toronto Support for zero tax increase. Concerned about the increase in his property taxes as a result of Current Value Assessment.
129. Mr. John Murphy, Serena Toronto, Scarborough Reconsider deletion of funding for his organization ($5.0 thousand of funding was deleted in the 1998 Estimates; wishes re-instatement of $3.5 thousand).
130. Mr. Larry Katz for Mr. Darin Jackson, Toronto Civic Employees Union Local 416, Toronto Supports the provision of animal services through in-house staff; opposed to contracting out. Opposes the restructuring target of 1,278 positions.
131. Ms. Deborah Sward for Ms. Lois Corbett, Toronto Atmospheric Fund, Toronto Wishes to maintain the T.A.F.'s arm's-length relationship with the City.
132. Mr. Franz Hartmann, (Dr. Dennis MacDonald), Toronto Environmental Alliance, Toronto Support for environmental protection.
133. Ms. Janet May,

Toronto

Environmental Alliance, Toronto

Support for the elimination of the use of pesticides in parks and golf courses.
134. Mr. John Wellner,

Toronto

Environmental Alliance, Toronto

Support for environmental programs. Support for HOV lanes (requests that $500.0 thousand budget reduction be re-instated). Requests that $30 million for demolition of east end Gardiner Expressway be re-considered. Supports Toronto Atmospheric Fund. Support for City's waste diversion policies.
5:00 - 6:00 p.m.
135. Mr. Ed Drass, Toronto Support for the capital budget of the Toronto Transit Commission.
136. Mr. Michael Khoo (Mr. Jessop), Toronto Support for Greensaver program and Toronto Atmospheric Fund.
137. Mr. Bregman for Mr. Rich Whate, ICLEI, Toronto Environmental Alliance, Toronto Support for Toronto Atmospheric Fund.
138. Ms. Elizabeth Byce, Secretary, Labour Council of Toronto and York Region Support for Budget Committee for no Toronto Transit Commission fare increases, review of user fee policies with public input, maintenance of grants at 1997 levels, and maintaining funding for nutrition for children.

Opposes privatization and any major losses of City jobs.

139. Mr. Jim Buller, Toronto Wants alternative approaches to property taxes.

Opposes Current Value Assessment.

Support for community agencies.

140. Mr. Gerard Van Deelen, Toronto Wishes to maintain 1997 service levels for 1998, 1999, and 2000.
140A Mr. Cameron Atkinson,

51 Division Community Police Liaison Committee

Support for the replacement of 51 Division Building.
141. Ms. Sarah Shartal, Toronto Absent.
142. Representative, Metro Youth Council Absent.
143. Representative, Rexdale Youth Council Absent.
144. Representative, Scarborough Youth Resource Centre Absent.
145. Ms. Penny Miller,

Representative, Toronto Young People Advisory Board

Requests that youth be included in all aspects of municipal decisions.
6:00 - 6:30 p.m.
146. Ms. Bronwen Morgan, Toronto Support for the Toronto Humane Society proposal for the delivery of animal services in the new City.
147. Representative, North York Youth Committee Absent.
148. Representative, Harriet Tupman Organization Absent.
149. Mr. Paul Clifford, President, Hotel Employees, Restaurant Employees Union Local 75, Toronto Absent.
150. Ms. Sonja Greckol, Women's Municipal Coalition, Toronto Opposes staff reductions; wishes Human Resources strategy of the new City to focus on access and equity issues.

Concerned over day-care funding. Wishes to maintain services.

8:00 - 9:00 p.m.
151. Mr. Graham Baldwin, President, Community Social Planning Council of Toronto, Toronto Leanne Regandanze...

grant $ are leveraged to get addition sponsorships, and by volunteerism - keep on giving.

152. Ms. Suzan Fletcher, East End Network, Toronto
153. Jeff Beach, Youth Assisting Youth, Toronto $17K new user fee - Police reference checks affects 70 at risk children. Willing to provide barter to pay fee (admin support).
154. Mr. Michael Dear, President, West Scarborough Neighbourhood Community Centre, Scarborough Consider consistency and certainty to allow planning of dependent agencies.

Depend on Scar bldgs. ($8k), fleet ($5k), criminal reference checks ($4k), $6k other .

155. Ms. Ira Applebaum, President, North York Community House, North York New immigrant settlement ask that other support programs continue unreduced (Welfare, Housing, etc.).
156. Ms. Jennifer Welsh, President, East York Meals on Wheels, East York 400 clients.....

Deficits in recent years.

"side-loading" loss of rent-free civic space.

New user fees (police) in kind support.

Property tax increases re bus occ tax ($2k).

157. Mr. Mario Calla, Costi-IIas, Toronto Training, counselling, new immigrant support services.

Increased demand, other service cutbacks, bus occ tax exempt status for not for profit gone $58k; 40% tax rebate required for not for profit.

158. Representative, Scarborough Tenants Association, Scarborough Health, property stds, fire & police dept. funding cuts jeopardize bldg. maintenance programs.

Sched. inspections needed.

159 Beth Wilson

Toronto Women's Co-op

Download of CMHC housing to municipality - risk of funding shortfalls and related program cuts - leave housing at Fed., CHF.
159b Ms. Sandra Seaborn, Co-ordinator, Street Help Line Program, Community Information, Toronto Absent.
160. Ms. Marjorie Sutton, Mount Dennis Community Association, Toronto Plead for continued support to re streetscaping etc. in York;

THS (SPCA) start recognizing tax funding.

161. Ms. Suzan Miner, Street Outreach Services, Toronto Absent.
9:00 - 10:00 p.m.
161 Linda Pitney

Fraud Investigator

Toronto Humane Society out of control: stop supporting them.
162. Ms. Kamal Kipfer, Toronto Absent.
163. Ms. Pam Prinold, Rexdale Partners, Toronto 13 community based agencies

seniors...

A newcomer... integration services are important.

Suggest develop multi-year funding for community agencies.

164. Ms. Fatima Filippi, Rexdale Women's Centre, Toronto Absent.
165. Ms. Hazel Webb, Rexdale Micro Skills, Toronto Give priority to addressing poverty among women - e.g. training Rex Micro Skills .
166. Mustapha Raji, Rexdale Youth Resource Centre, Toronto Crime linkage to youth hopelessness; i.e. don't cut support to this program.
167. Terri Noseworthy, Etobicoke North Community Information Centre, Toronto Absent.
168. Mr. Rick Kelly, Highfield Community Enrichment Project, Toronto Absent.
169. Ms. Salena Cicchirillo, East View Neighbourhood Community Centre, Toronto Centre important to youth - asks that support be continued in 1998.
170. Mr. Rod Hamilton, Kidney Foundation of Canada, Toronto Absent.
171. Ms. Margaret Morris, Toronto Absent.
172. Ms. Cindy Brown, YMCA First Stop, Toronto Absent.
Unknown, President of Centennial Recreation Community Association (1) underpass at bottom of Port Union Road (public health and safety).

(2) continuation of Highland Creek trail.

(3) Heron Park Arena - fix rink.

Sylvia Langer, Greenist City program Against reduction of Toronto's atmospheric fund. Plea to keep these monies.
Elizabeth Holder Senior citizen concerned with seeking a reduction in taxes. Council to consider either a deferral or reduction of taxes for senior citizens.

CVA unfair to seniors.

Doria Seville, small business owner in Ward 21 Many discrepancies and inaccuracies in CVA roles. Assessment should be based on square footage, location, and actual costs of services rendered by the City to the business owner.

In allowing the assessment to stand, ghetto sections of the City will arise, revenues will not be realized and more people on social assistance.

CVA should not be accepted.

Romona Gunn, Women's Centre for South Asian women Continued support for community grants program and agency support services.

Want to exempt non profit and charitable organizations from taxes.

Mr. McCormack, McCormack Centre To reinstate $350,000 in the 1998 capital budget to revitalize McCormack Play Centre.

Petitions and letters from children supporting this.

Recommend by the Budget Committee to be considered as part of the Five-Year Parks and Recreation Capital Works Program.



15

Workers' Compensation - Transfer of the Toronto Public Library

Board from Schedule 1 to Schedule 2

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

The purpose of this report is to propose a recommendation to create one uniform Workers' Compensation funding mechanism for the Toronto Public Library Board, as required by Workplace Safety and Insurance Board.

Funding Sources, Financial Implications and Impact Statement:

The cost of the transfer to Schedule 2 is $478,094.86. The cost of this transfer was included in my report of April 3, 1998 on preliminary transition projects. Payment from the Workers' Compensation Reserve Fund would be repaid from the expected savings. There is no impact on the 1998 Operating Budget.

Recommendations:

It is recommended that Council authorize the Chief Financial Officer & Treasurer to remit immediately to the Workplace Safety and Insurance Board the amount of $478,094.86 in satisfaction of the transfer of the Toronto Public Library Board from Schedule 1 to Schedule 2 pursuant to the Workplace Safety and Insurance Act.

Discussion:

The Workplace Safety and Insurance Board requires that when public sector organizations amalgamate and they previously had components in Schedule 1 and Schedule 2, they must convert entirely to Schedule 2.

Under the Workplace Safety and Insurance Act there are two funding arrangements for employers.

Schedule 1 employers are collectively liable for paying the costs of workers' compensation claims. These employers are assessed within their rate groups and pay an annual "premium" for coverage of all claims incurred. They are subject to an experience rating program which results in refunds or surcharges depending on claims performance.

Schedule 2 employers are individually liable for paying the costs of workers' compensation claims. Schedule 2 employers self-insure the risk of their claims, paying the benefits as they arise, plus an administrative fee (presently 15 percent).

Since costs under Schedule 2 are related to claims incurred, savings are obtained from good heath and safety and rehabilitation programs. It is anticipated that savings will accrue to the Library Board each year.

The Library Board does not have the necessary funds to cover the transfer fee expenditure and has requested the City to pay the transfer charge on behalf of the Board. This payment would come from the City's reserve fund and would be repaid by the Board out of future years' savings.

Conclusions:

The transfer to Schedule 2 for the amalgamated Toronto Library Board is required under the Workplace Safety and Insurance Board. The Workplace Safety and Insurance Board has requested that the fee for the transfer be paid immediately. It is recommended that Council approve the expenditure and that the City make the payment on behalf of the Library Board and that the Toronto Library Board repay the amount from future years' Workplace Safety and Insurance savings.

Contact:

Al Shultz, 416 397-5240, Finance Department .



16

Tax Options - 1998-2000

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the City accept the $50 million grant and the $100 million loan offered by the Province, with the full amount of the grant being applied in 1998.

Background:

The Chief Administrative Officer and Chief Financial Officer and Treasurer made a verbal presentation to the Budget Committee on April 20, 1998 on the financial pressures that the City is facing over the next three years and identified a number of options to deal with these pressures and consequential implications.

17

Adjustments to 1997 Surplus and Offsetting

1998 Budget Adjustments

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the City Clerk:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that the loan in the amount of $14.8 million be repaid, using cash generated from the Toronto Transit Commission 1997 unbudgeted revenue, pursuant to the understanding that existed with the former Municipality of Metropolitan Toronto and that it be approved on nunc pro tunc basis.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 20, 1998) from the Chief Financial Officer and Treasurer regarding adjustments to 1997 surplus and offsetting 1998 Budget adjustments.

Mr. David Gunn, Chief General Manager, and Mr. Vince Rodo, General Secretary of the Toronto Transit Commission appeared before the Budget Committee in connection with the foregoing matter.

--------

(Report dated April 20, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To seek authority to apply an extraordinary 1997 operating surplus of $14.8 million to fund one time 1998 operating budget items consisting of transitional costs of $8.4 million and partial forgiveness of a loan to the Toronto Transit Commission in the amount of $6.4 million.

Funding Sources, Financial Implications and Impact Statement:

The increase in 1997 surplus of $14.8 million due to unapplied TTC operating revenues would reduce the City's 1998 budget requirements but cause a corresponding increase in 1999 if not repeated. Current forecasts from the TTC indicate that this surplus will not be repeated.

The recommended one time provision to corporate amalgamation/transition costs would partially offset the impact of the surplus on the 1998 budget, and cause a corresponding reduction in the need to rely on debt financing for transitional items not currently provided for in the 1998 budget.

The recommended reduction or repayment of $6.4 million of a TTC loan obligation to the former Metro is in lieu of the TTC's planned 1997 loan payment to the City, and recognizes the valuation of the asset securing the debt, specifically the bus terminal property owned by the TTC subsidiary, Metro Toronto Coach Terminal Inc. (MTCTI). In conjunction with the provision to transitional costs, the loan forgiveness eliminates the impact of the 1997 surplus on the 1998 budget requirements.

Recommendations:

It is recommended that:

(i) the TTC debt to the City, currently estimated at $20 million, be reduced by repayment in the amount of $6.4 million, corresponding to the value of the TTC's 1996 write down of assets securing the debt; and,

(ii) an $8.4 million transfer to the "Transition Project Reserve Fund" be incorporated in the 1998 operating budget.

Council Reference/Background/History:

In 1991 the former Metro Toronto Council approved a loan of $13.6 million to the Toronto Transit Commission to facilitate a cash dividend to the TTC from its wholly owned subsidiary, the Metro Toronto Coach Terminal Inc., and the creation of the Transit Improvement Fund, a reserve intended primarily to provide additional funding for TTC's capital initiatives. The fund was totally depleted in 1995.

The loan amount was based on a valuation of MTCTI's primary asset, the bus terminal building. The MTCTI had borrowed the funds from the TTC, against the value of the terminal, to fund the dividend. The accumulated debt and interest on the loan drew into question the liquidated value of the MTCTI terminal. A 1996 valuation of MTCTI at $12.6 million led the TTC to include an unbudgeted $6.4 million write down of the book value of its loan to the MTCTI, funded from accumulated earnings. Metro did not reduce the value of the TTC loan at that time.

In operating variance reports to Metro Council provided for information, the intention to use 1997 surplus TTC revenues of $14.8 million to facilitate the reduction of the loan obligation to Metro was indicated. However, at no time was explicit Council approval for application of surplus revenue sought or received.

Comments and/or Discussion and/or Justification:

The $14.8 million increase in the 1997 surplus arises from surplus operating and extraordinary revenues accrued by the TTC. In 1997, it had been planned that these funds would be retained by the TTC, facilitating a corresponding loan payment to the former Metro. These intentions were never formally approved by Metro Council. As a consequence, the Metro operating subsidy to the TTC must be reduced by $14.8 million, as confirmed by the City Auditor, increasing the Metro 1997 surplus, and eliminating the TTC's planned loan repayment option.

The increase in surplus would reduce the 1998 net taxation requirements directly. However, since the surplus is deemed unsustainable, it would result in a budget pressure in the 1999 budget year.

Two options can be considered in dealing with these $14.8 million surplus funds.

Option 1 (the previously planned use) would see the entire $14.8 million be applied to reduce the outstanding loan on the City's books. This would restore the City's cash position and allow the funds to be invested.

Option 2 would be to apply $6.4 million towards the outstanding loan to bring the outstanding loan down to the value of the asset with the balance of $8.4 million to be used by the City to fund transition projects. At this point in time, the City is financially strapped and these funds could provide much needed funding for transition projects.

It is therefore recommended that the City approve a partial offset to the impact of the surplus, and reduce $6.4 million of the TTC loan obligation to the City. TTC staff indicate that, even with the recommended repayment, it is unlikely that liquidation of the MTCTI would derive sufficient funds to repay the remaining outstanding debt obligation of approximately $13.5 million to the City, suggesting that forgiveness of the loan may be necessary in the future.

A separate report to Budget Committee details the anticipated capital and operating funding requirements for one time transitional costs for the City to deal with amalgamation and related restructuring. The $8.4 million provision to corporate amalgamation/transition costs recommended in this report would offset the remaining impact of the surplus on the 1998 and 1999 budgets, and cause a corresponding reduction in the need to rely on debt financing for transitional items not currently provided for in the 1998 budget.

Conclusion:

The increased 1997 surplus of $14.8 million results from surplus TTC operating and extraordinary revenues. It is recommended that because of the City's financial pressures with respect to transition funding that the City's 1998 operating budget be adjusted to offset the one-time impact of the surplus through a $6.4 million repayment of a portion of the outstanding debt owed to the City by the TTC and furthermore, that the 1998 budget include a one time provision to corporate amalgamation/ transitional costs, offsetting the remaining portion of the 1998 TTC surplus.

Contact Name:

Rob Hatton, Interim Budget Lead, Urban Environment and Development Committee,

telephone: 392-9149, fax: 392-3649, Internet: robert_hatton@metrodesk.metrotor.on.ca.



18

Non-Union Compensation Program,

Development and Implementation

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the report (April 14, 1998) from the Executive Director of Human Resources and Amalgamation.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 14, 1998) from the Executive Director of Human Resources and Amalgamation, regarding the development of a non-union compensation program.

--------

(Report dated April 14, 1998, addressed to the

Budget Committee from the

Executive Director of Human Resources and Amalgamation)

Purpose:

As part of Strategic Restructuring, work is required to establish new Compensation structures for the City of Toronto. This report is to advise Committee of the significance of and approach to developing a new Total Compensation Program applicable to Non-union employees.

Funding Sources, Financial Implications and Impact Statement:

The Chief Financial Officer and Treasurer has recommended that funding for consulting services related to this project be derived from the Employee Benefit Reserve Fund and that the Chief Financial Officer and Treasurer incorporate the cost in the request to the Province for transition funding. Such cost is a direct result of amalgamating Compensation Programs and Non-union Pay Equity Plans for the City of Toronto.

Recommendation:

It is recommended that the project cost related to the development of a new Non-union Compensation Program be included in the request to the Province for transition funding.

Background:

Following evaluation, it has been determined that the existing compensation programs of the seven former municipalities cannot be used related to legislative requirements and the organizational needs of the (new) City of Toronto.

In November 1997, a Request for Proposals (RFP) for compensation consulting services was issued in order to establish a Total Compensation Program for Non-union positions. It is intended that the Human Resources Compensation Team in consultation with operational management and supported by the consultant will develop the Program including Job Evaluation; Salary Administration; Internal Equity; External Competitiveness; Performance Management; Merit and Competency-based Pay; Team/Individual Gain-Sharing; and Non-Cash Reward and Retention Strategies.

An appropriate project plan and implementation schedule have been determined to meet the City's requirements. Further, there will be the necessary knowledge transfer from the consultant by the end of the project to ensure successful implementation and on-going administration of the program by City staff. It is imperative that this initiative proceed immediately to ensure that the requirements of the Employment Standards Act equal pay for equal work provisions and the Pay Equity Act are satisfied.

As a result of the RFP, the selection of an appropriate compensation consultant will be considered by the Bid Committee.

Discussion:

Consistent with the Strategic Restructuring - Human Resources Principles and Strategic Directions recently approved by Council, the new Compensation Program applicable to Executive, Management and other Excluded employees will be established within the following framework:

(a) is compliant with applicable legislation (Employment Standards, Pay Equity);

(b) is flexible in meeting ongoing changes and challenges;

(c) is fair, equitable and gender-neutral;

(d) promotes, recognizes and rewards exceptional performance;

(e) integrates core competencies and encourages team orientation;

(f) is able to attract and retain exceptional employees;

(g) recognizes management accountability and fiscal responsibility in achieving results; and

(h) ensures appropriate competitive positioning related to high-performing broader public sector and private sector organizations.

There will be integration of this program with the strategic plan to consolidate employee benefit coverage and introduce an appropriate alternative innovative benefit plan design.

Conclusion:

The 9 month project plan supported by the consultant, while aggressive, will appropriately expedite this initiative, thereby assisting to harmonize pay levels and move the organization towards its ultimate business objectives. It will enable the Corporation to maintain legislative compliance.

Contact Name and Telephone Number:

R. Alan Deans, Human Resources, Scarborough Civic Service Centre, (416)396-7759.



19

Amalgamation and Restructuring 1998 Funding Requirements

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) the funds in the amount of $2,500,000.00 be approved for the cost of hiring external consultants to assist with amalgamation and restructuring on a one time only basis in 1998 and that such funding be allocated from the Employee Benefit Reserve Fund or other appropriate Reserve Fund;

(2) the Chief Administrative Officer report to the Budget Committee in four months' time with a full update and review on the expenditures and work to be provided; and

(3) the Chief Administrative Officer, in hiring the consultants, utilize as many existing staff as possible.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Executive Director of Human Resources and Amalgamation regarding 1998 funding requirements for amalgamation and restructuring.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Executive Director of Human Resources and Amalgamation)

Purpose:

The purpose of this report is to describe the funding for external consulting requirements for amalgamation and restructuring for 1998.

Source of Funds:

The Chief Financial Officer has recommended funding this initiative from the Employee Benefit Reserve Fund.

Recommendations:

It is recommended that the cost of hiring external consultants to assist with amalgamation and restructuring be included in the request to the Province for transition funding.

Background:

At the April 3, 1998, Budget Committee meeting, the Committee had before it a report, "1998 Preliminary Transition Project Requests - Consolidated Listing," from the Chief Financial Officer and Treasurer. The report was deferred to the Budget Committee meeting of April 20, 1998, with the respect that staff report on the proposed transition projects.

Approach to Amalgamation and Restructuring:

The amalgamation and restructuring process is being undertaken in three phases. Phase 1 was the establishment of the six departments and the hiring of Commissioners. This phase is now complete. Phase 2 was divided into two parts. Phase 2A entailed designing the organizational structure of divisions within departments and the hiring of senior managers (e.g. executive directors, general managers) reporting directly to the Commissioner.

This phase is at various stages in the organization, with hiring near completion in some departments, while organizational design work is still occurring in other departments. Phase 2B involves the organizational design of units within Divisions and the appropriate management levels below Director. This phase will be complete by the end of May 1998. Phase 3 involves service rationalization including examining a full range of service delivery options. This phase will follow immediately upon completion of Phase 2B and will be complete by October 1998.

Council directed staff to obtain external consulting, to complement in-house knowledge and experience with areas of expertise not available within the Corporation. This approach is also useful for validation purposes.

There has been a two-stage process for the hiring of external consultants for corporate restructuring. The first stage was a Request for Expressions of Interest for pre-qualification of consultants. Fifty-five submissions were received and eighteen companies were qualified to compete for work through a Request for Proposals (RFP) process. The second stage was a Request for Proposals for projects submitted by departments. Sixteen of the pre-qualified companies qualified for twenty-eight projects. This week, interviews with these companies will take place and final decisions made on the successful firms. Decisions will be confirmed within the requirements of the Purchasing By-law.

An overall budget of $5,000,000.00 has been set for restructuring consulting assistance. Budget Committee approval is being sought for the phase that involves organizational design and restructuring. The estimate for this phase, based on the proposals received is $2,500,000.00. The funding approval for the next phase, service rationalization, will be sough later this year.

Contact Names:

Claire Tucker-Reid, 397-4149, Roda Contractor, 397-0459 .



20

Financial Support to the Caribbean Cultural Committee

and Caribana

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the City Clerk:

Recommendation:

The Budget Committee on April 20, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, as per Council's direction at its meeting on April 16, 1998, that the grants envelope be increased by $75,000.00.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 20, 1998) from the City Clerk forwarding Clause No. 3 of Report No. 5 of The Strategic Policies and Priorities Committee, headed "Financial Support to the Caribbean Cultural Committee and Caribana".

--------

(Transmittal letter dated April 20, 1998, addressed to the

Budget Committee from the City Clerk)

City Council on April 16, 1998, had before it Clause No. 3 contained in Report No. 5 of The Strategic Policies and Priorities Committee, headed "Financial Support to the Caribbean Cultural Committee and Caribana".

Council also had before it, during consideration of the foregoing Clause, a report dated April 15, 1998, from the Chief Administrative Officer, and a report dated April 16, 1998, from the Chief Financial Officer and Treasurer, in response to requests from the Municipal Grants Review Committee regarding the issue of City of Toronto financial support to the Caribbean Cultural Committee and Caribana.

Council also had before it, during consideration of the foregoing Clause, the following:

(i) a communication dated April 16, 1998, from Mayor Lastman advising of his support for additional funding to the Caribana; and

(ii) a submission (undated) from Councillor Rob Davis, York - Eglinton, comparing the rates charged at various Toronto hotels on the following dates: April 11, 1998; July 11, 1998 and August 1, 1998.

In this regard, Council adopted Recommendations (A) to (F) of the Municipal Grants Review Committee embodied in the report dated April 14, 1998, from the City Clerk, subject to:

(1) the additional grant of $150,000.00 for the Caribana Festival mas bands and cultural producers referred to in Recommendation (A)(1)(b) being approved and provided from the Grants envelope; and

(2) deleting the names "Councillor Tom Jakobek" and "Councillor Bas Balkissoon" from the membership of the Caribana Festival Support Group and inserting in lieu thereof the following:

(a) the Mayor, or his designate; and

(b) the Budget Chair, or his designate.

Council also adopted the following recommendations:

"It is recommended that:

(1) the grant be deemed to be in the interest of the municipality;

(2) the Budget Committee be requested to increase the grants envelope by $75,000.00;

(3) the Commissioner of Economic Development, Culture and Tourism be requested:

(a) to devise and execute an economic development study of the 1998 Caribana Festival measuring direct and indirect impacts, such study to include the value of volunteer hours and public sector impacts; and

(b) in consultation with Special Events' staff:

(i) to submit a report to the Economic Development Committee on the feasibility of the City of Toronto entering into a 'strategic joint venture partnership' with the Caribbean Cultural Committee Inc. (CCC) in the production of the annual Caribana Festival; and

(ii) after having assessed the economic benefits of the 1998 Caribana Festival, submit a report to the Strategic Policies and Priorities Committee, through the Economic Development Committee, on the feasibility of changing the mechanism by which funds flow to Caribana to a method which would allow the organization to market revenue-positive events with more lead time; and

(4) the report dated April 16, 1998, from the Chief Financial Officer and Treasurer, embodying the following recommendations, be adopted:

'It is recommended that:

(1) if the Chief Financial Officer and Treasurer receives donations to the City which are accompanied by a desire that the City use such monies to support Caribana, that she then report to Council for instructions on the disbursement of any such donations;

(2) the City demonstrate its support for the Caribana festival by providing the CCC with any necessary assistance which will facilitate its receiving Charitable Status on a timely basis; and

(3) the appropriate City officials be authorized and directed to take the necessary steps to give effect thereto.' "

--------

Clause No. 3 of Report No. 5 of the Strategic Policies and Priorities Committee, titled "Financial Support to the Caribbean Cultural Committee and Caribana", adopted by the Council of the City of Toronto on April 16, 1998, was forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its special meeting on April 28, 1998, and a copy thereof is on file in the office of the City Clerk.



21

1998 Capital Program Parks and Recreation -

Supplementary Arrangements - Woodbine Park Construction

(East Toronto)

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following report (April 28, 1998) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

Supplementary arrangements, required for the 1998 Woodbine Park construction program, are provided for City Council approval in conjunction with the 1998 Capital program.

Source of Funds:

No funding impact.

Recommendation:

That City Council approve the following implementation arrangements for the Woodbine Park project( P&R , Project #18) in conjunction with the approval of the 1998 Capital program:

(i) That the Section 37 Agreement dated May 22, 1996, between EMM Financial Corp, The City of Toronto, and the Ontario Jockey Club be amended to include Initial Park Improvements funded by the 1998 Capital Budget in accordance with plans, specifications and conditions approved by the Commissioner of Economic Development, Culture and Tourism, and that City officials be authorized to sign any necessary agreement

(ii) That Initial Park Improvements include the removal of 17 trees in the portion of Lakeshore Blvd adjacent to the park as well as fill, grading and tree planting in accordance with the design for Woodbine Park developed by the Commissioner

Comments:

When Council approves the 1998 Capital program for Parks and Recreation, certain details required for Woodbine Park (project #18) implementation should also be approved as set out below.

The Woodbine Park project and design have progressed in tandem with the budget in consultation with many individuals and groups in the community. The 1998 Capital program includes funding for Woodbine Park in 1998 at $1.5 million. The Woodbine Park Design dated April 17, 1998 has been developed in consultation with the community, including an open house held on April 18, 1998, culminating many months of work to achieve a consensus.

The Section 37 Agreement between EMM Financial Corp, The City of Toronto, and the Ontario Jockey Club, dated May 22, 1996, contains arrangements respecting site preparation work and initial park construction work that have proven satisfactory in terms of quality, timing, control and cost of the work performed. Work will continue under this contract throughout 1998 on the park site and adjacent streets.

(1) Amendment to Section 37 Agreement:

I am now recommending that park improvement work funded by the 1998 Capital program for the Woodbine Park project be implemented under an amendment to the Section 37 agreement provisions, to minimize costs and delay and facilitate coordination of the site improvements planned for 1998 applying the 1998 Capital funds, instead of the City's standard tendering and contract award process. Section 37 agreements frequently provide for park construction by the land owner or developer on behalf of the City.

Arrangements to implement the above should be according to plans specifications and conditions satisfactory to the Commissioner, Economic Development, Culture and Tourism, in consultation with relevant City officials. Appropriate City officials should be authorized by City Council to take the necessary steps to give effect thereto, including signing any necessary agreements.

(2) Lakeshore Blvd. - Tree Removals and Tree Plantings:

Park improvements will occur on lands adjacent to the designated parklands to maximize the effect of the park concept according to the park design dated April 17, 1998. Previous approval by City Council and Metro Council for tree removals on Lake Shore Boulevard East on the southern edge of Woodbine Park were granted subject to further community consultation illustrating the conditions and circumstances of the existing trees and the proposed grading and tree replacements. The condition has been satisfied in conjunction with the community consultation on the park design and the removal of 17 trees on the north side of Lakeshore Blvd. are now required, so that the new grading and tree planting design can be implemented.

(3) Teletheatre Parking Lot:

The Woodbine Park Design of April 17, 1998 relocates the teletheatre parking lot westerly onto City lands and extends the park onto a generally equivalent area of the parking lot lands owned by EMM Financial Corp. This arrangement will require reciprocal leases between EMM Financial Corp/the Ontario Jockey Club and the City, as well as certain planning approvals to proceed, which I am pursuing in consultation with the Commissioner of Urban Development and the City Solicitor.

Contact Name:

Susan Richardson, Email: srichard@city.toronto.on.ca, Tel: 416-392-1941, Fax: 416-392-0845 .



22

1998 Operating and Capital Budgets and 1997 Sinking Fund

Surplus and Annual Sinking Fund Levies for 1998

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee considered this matter at its special meeting held on April 14, 1998.

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 9, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on March 30, and 31, April 2 and 3, 1998 submits to the Strategic Policies and Priorities Committee, and Council, the following recommendations, that:

(1) all Capital projects previously approved and which are proceeding in 1998 be included in the 1998 Capital Budget document;



(2) those Capital projects which have been approved and are not proceeding in 1998 but need to be carried out, be listed in the 1998 Capital Budget and the monies held;

(3) those Capital projects which have been approved and are not proceeding in 1998 and will not be completed within a reasonable period of time, be shown as cancelled and funds be placed back into the general budget;

(4) any funds which may become available from completed capital projects be included in the quarterly variance reports being submitted to the Budget Committee; and

(5) the recommendations contained in the report (March 27, 1998) from the Chief Financial Officer and Treasurer regarding 1997 Sinking Fund Surplus and Annual Sinking Fund Levies for 1998, be adopted.

The Budget Committee reports having:

(a) deferred consideration of the report (March 29, 1998) from the Chief Financial Officer and Treasurer, entitled "Preliminary Guidelines for Defining Operating and Capital Items", in order for a workshop to be held with the Finance staff and members of the Budget Committee for a report back to the Budget Committee in June, 1998; and

(b) received the following as information:

(i) the report (March 16, 1998) from the Chief Financial Officer and Treasurer regarding the status on RTEP Financing and the Reserve Fund;

(ii) the report (March 30, 1998) from the Chief Financial Officer and Treasurer regarding the 1998 Capital Budget - Continuity Analysis of Reserve Funds, be received as information and incorporated into the Budget document; and

(iii) the joint reports (March 28 and 31, 1998) from the Chief Administrative Officer and the Chief Financial Officer and Treasurer regarding the Status Report on the 1998 Operating and Capital Budget and the Proposed Operating and Capital Budgets.

Background:

The Budget Committee on March 30 and 31, April 2 and 3, 1998, had before it the following:

(1) report (March 16, 1998) from the Chief Financial Officer and Treasurer regarding

the status on RTEP Financing and the Reserve Fund;

(2) report (March 27, 1998) from the Chief Financial Officer and Treasurer regarding the 1997 Sinking Fund Surplus and Annual Sinking Fund Levies for 1998;

(3) joint report (March 28, 1998) from the Chief Administrative Officer and the Chief Financial Officer and Treasurer, regarding a Status Report on the 1998 Operating and Capital Budget and a summary (March 30, 1998) entitled 1998 Capital Program, Summary of Changes Identified by Community Councils and Standing Committees;

(4) report (March 29, 1998) from the Chief Financial Officer and Treasurer regarding Preliminary Guidelines for Defining Operating and Capital Items;

(5) report (March 30, 1998) from the Chief Financial Officer and Treasurer regarding Previously Approved But Unstarted Capital Projects;

(6) report (March 30, 1998) from the Chief Financial Officer and Treasurer regarding Previously Approved and Started Capital Projects;

(7) report (March 30, 1998) from the Chief Financial Officer and Treasurer regarding the 1998 Capital Budget - Continuity Analysis of Reserve Funds; and

(8) joint report (March 31, 1998) from the Chief Administrative Officer and the Chief Financial Officer and Treasurer, regarding the 1998 Proposed Operating Budget.

--------

The following material was forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its special meeting on April 14, 1998, and copies thereof are on file in the office of the City Clerk:

- Joint Report titled, "1998 Proposed Operating Budget", dated March 31, 1998, addressed to the Budget Committee, from the Chief Administrative Officer and Chief Financial Officer and Treasurer, referred to in the transmittal letter;

- Appendices A, B, C and D attached to the foregoing report;

- Joint Report titled, "Status Report on the 1998 Operating and Capital Budget", dated March 28, 1998, addressed to the Budget Committee, from the Chief Administrative Officer and Chief Financial Officer and Treasurer;

- Report titled, "Previously Approved but Unstarted Capital Projects", dated March 30, 1998, from the Chief Financial Officer and Treasurer; and

- Report titled, "Previously Approved but Started Capital Projects", dated March 30, 1998, from the Chief Financial Officer and Treasurer.

23

Recommended 1998 Capital Budget and Financing Authorities

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following transmittal letter (April 21, 1998) from the Budget Committee:

Recommendations:

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

(1) the adoption of the report (April 16, 1998) from the Chief Financial Officer and Treasurer; and

(2) that the Chief Financial Officer and Treasurer include in any reports on a project by project basis the net effect of such projects in next year's budget.

Background:

The Budget Committee on April 20, 1998, had before it a report (April 16, 1998) from the Chief Financial Officer and Treasurer regarding the recommended 1998 Capital Budget and financing authorizations.

--------

(Report dated April 16, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To table for approval the 1998 capital budget as recommended by the Budget Committee and to seek authority for specific gross financing for each capital project.

Financial Implications:

The recommendations contained in this report would result in an increase in operating expenditures relating to debt charges of approximately $1 million in 1998. This amount is reflected within the Operating Budget being recommended by the Budget Committee.

The 1998 gross Capital Budget as recommended by the Budget Committee totals $968 million. Of that amount, there is previously approved financing of $730 million from prior years' approvals and the 1998 Interim Capital Budget approved by Council on February 4, 1998. The recommendations herein would approve the balance of $238 million for 1998, along with an additional $136 million in gross commitments required beyond 1998.

Recommendations:

It is recommended that:

(1) the 1998 gross capital budget for each project contained in Appendix B to this report be approved;

(2) specific gross financing authority as contained in Appendix B be approved;

(3) no new contracts be issued without the approval of the Budget Committee for tax supported capital projects requiring borrowing for which no cash flow has been included in the 1998 gross capital budget contained in Appendix B, irrespective of whether previous financing authority exists; and

(4) the Chief Financial Officer and Treasurer be authorized to transfer individual capital projects between service areas to reflect refinements to organizational responsibilities.

Council Reference:

Budget Committee at its meeting of March 31 and April 2 and 3, 1998, recommended capital programs for each service area. This report formalizes the 1998 capital budget and specific project financing based on the recommendations made at that meeting.

Discussion:

Appendix A contains a summary and Appendix B the details by project of the 1998 Capital Budget recommended by the Budget Committee. Approval is now formally sought for the gross 1998 expenditures as shown in Appendix B. The recommendations contained herein would result in projected borrowing for property tax supported programs of $123 million, made up of $93 million for the base program and a net of $30 million related to the 1998 portion of Provincial downloading in respect of the TTC. The latter amount is net of a recommended increase in the capital from current of $15 million contained in the recommended 1998 Operating Budget. A further $44 million in borrowing is projected for the Rapid Transit Expansion Program (RTEP), the debt charges for which are funded in 1998 from the RTEP Reserve. The net requirements of the balance of the Capital Budget, for example, the water system, parking, TEDCO, etc., is funded from user fees.

Also contained in Appendix B, under the heading "Financing Authorizations" are the following:

(1) 1998 Previously Authorized - which represents previously approved funding which is available in 1998; and

(2) recommended additional gross financing approvals for each project.

As a general rule, only financing approval for 1998 requirements has been included, since it is the intent of the Budget Committee to seek Council approval of the 1999-2003 Capital Program before the end of 1998. Exceptions have only been made when a single year approval would cause operational or contractual problems for the City, as illustrated in the following exceptions:

(1) multi-year contracts require financing authority beyond the end of 1998. As an example, the purchase by the TTC of Orion II vehicles for the Wheel Trans service is planned through a five year schedule on the basis of a single order. A total of $17.4 million in financing authorization is recommended, with a 1998 cash flow component of $2 million. This approval will allow the TTC to take advantage of generally better price-delivery conditions than if the contract was split into one or two year phases;

(2) full financing approval is recommended for new projects which will be completed within the next two to three years. For example, the Heron Park Recreation Centre has a 1998 gross cash flow of $2.9 million, but financing for the total project cost of $5.5 million is recommended to allow the department to award the construction contract for the full project; and

(3) financing has been recommended for some maintenance projects which extend beyond the end of 1998 but which would normally be part of a single contract. Were the financing authority be rigidly limited to cover 1998 expenditures only, some projects would have to be arbitrarily split into two or more contracts and may end up costing the City more.

In certain cases, previously authorized funding may not have been fully expended by the end of 1997 and may therefore be available to partly or fully fund 1998 expenditures. The recommended additional financing approval in these situations may therefore be less than the 1998 capital budget. In other cases, previously approved financing may no longer be required and reversals of financing authorities are recommended.

Financing authorizations have not been recommended in respect of the Best Practices program in the Water budget, pending further study and justification. Financing authority from Council will be sought for this item at a later date.

As a note, there may be some projects which are currently showing no 1998 budgeted expenditures, even though previous Councils have approved specific financing authority. To ensure that such projects are consistent with the 1998 budget considered by the Budget Committee, and to control borrowing levels to the extent possible, it is recommended that no new contracts be issued without the approval of the Budget Committee for tax supported capital projects requiring borrowing for which no cash flow has been included in the 1998 gross capital budget contained in Appendix B.

Finally, as responsibilities among the various service areas are clarified, individual projects may have to be reassigned. It is therefore recommended that the Chief Financial Officer and Treasurer be authorized to transfer individual capital projects between service areas to reflect refinements to organizational responsibilities.

Conclusions:

The recommendations contained herein will allow Council to formally adopt the 1998 Capital Budget and financing authorizations for each capital project as recommended by the Budget Committee.

Contact Name:

Len Brittain, 392-5380; Fax: 392-3649; Internet: len_s._brittain@metrodesk.metrotor.on.ca



24

1998 Capital Budget and Financing Authorizations

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following report (April 23, 1998) from the Budget Committee:

Purpose:

To summarize the 1998 capital budget and financing authorizations as recommended by the Budget Committee.

Financial Implications:

The recommendations contained in this report would result in a slight decrease in operating expenditures relating to debt charges of approximately $700 thousand in 1998. This amount is reflected within the Operating Budget being recommended by the Budget Committee.

The 1998 gross Capital Budget as recommended by the Budget Committee totals $1,054 million, of which $86 million relates to anticipated 1998 transition related costs. Of the total recommended budget, there is previously approved financing of $730 million from prior years' approvals and the 1998 Interim Capital Budget approved by Council on February 4, 1998. The recommendations of the Budget Committee would approve the balance of $324 million for 1998, along with an additional $134 million in gross commitments required beyond 1998.

Recommendations:

It is recommended that:

(1) the 1998, gross Capital Budget as recommended by the Budget Committee totalling $1,054 million, of which $86 million relates to anticipated 1998 transition related costs, be adopted;

(2) the report dated April 16, 1998, from the Chief Financial Officer and Treasurer, "Recommended 1998 Capital Budget and Financing Authorizations", as amended by the Budget Committee at its meeting of April 20, 1998, be adopted; and

(3) Community Councils be requested to commit to a full review of capital programs for Parks and Recreation, Facilities and Transportation in their jurisdictions and recommend five year capital priorities for 1999-2003 for the consideration of the Budget Committee by no later than September, 1998.

Council Reference:

Budget Committee at its meeting of April 20, 1998, recommended a 1998 capital budget and financing for each service area. This report summarizes the results of decisions made at that meeting.

Discussion:

Summary of Recommended 1998 Capital Budget

Below is the 1998 recommended capital program for property tax supported and user rate supported capital projects:

The largest category of expenditure is for major maintenance and rehabilitation, almost 60 percent. of the total capital program. The next largest category is growth/expansion, 22 percent, mainly related to construction of the Sheppard Subway.

Following are other specific projects included in the 1998 capital budget:

- purchase of replacement subway cars

- bridge reconstruction, for example, the Gardiner Expressway bridges over the Humber River

- water treatment plant upgrades

- watermain relinings

- upgrades to more than 40 recreation and community centres, arenas and pools

- parkland acquisition

- renovations to home for the aged

- demolition of Exhibition Stadium

- upgrades to Casa Loma

- new and upgraded fire stations

- technology and facility upgrades for the police

- ongoing maintenance of landfill sites

- upgrades to the Toronto Zoo

- costs of transition to the new City

A summary of the 1998 Capital Budget and recommended financing for each service area as recommended by the Budget Committee is attached to this report as Appendix A.

Funding of the 1998 Capital Program:

The following graph highlights the funding sources for the recommended tax supported program, excluding one-time transition costs (user rate supported programs and funding for Rapid Transit Expansion including the Sheppard Subway are also excluded since these do not affect the property tax in 1998):

In a typical year, the City can borrow $110 million for capital purposes without causing higher carrying costs of debt in future operating budgets. The required borrowing of $123 million as shown above is made up of two components:

- $93 million required for the City's base program, which is lower than the $110 million level; and

- $30 million as a net result of Provincial downloading to the Toronto Transit Commission in 1998.

Additional borrowing of up to $75.5 million will be required for transition related capital projects, as discussed below.

Had the traditional Provincial support of 75 percent. of capital expenditures been maintained, the TTC would have received $45 million more in 1998 from the Province. To partially offset this loss, the recommended 1998 operating budget contains an increase in the capital from current, or "pay as you go" funding, of $15 million. This reduces the full impact of the Provincial reductions to $30 million.

By the year 2001, the complete elimination of all Provincial support to the TTC will mean an annual loss of $180 million required to maintain the TTC's subways, vehicles and other assets in a state of good repair. Over the next few years, the City will have to continue to deal with that loss in some manner.

A full corporate review of the TTC's five year funding requirements will be brought back before the Budget Committee in September, 1998. As well a comprehensive corporate debt management plan will be developed which takes into consideration possible funding sources, financing strategies and other initiatives, as a way of reducing the Corporation's reliance on debt.

Although the recommended borrowing level is slightly above the $110 million longer term stable borrowing level, net debt charges will drop by about $700 thousand in 1998 due to a combination of projected interest rates, redemption of old debt issued in prior years, borrowing required for prior year's expenditures, and the timing of debt issues in 1998.

Transition Costs:

The Budget Committee has recommended a 1998 funding envelope of $85.5 million for transition related costs. This is made up of an estimated $45 million for 1998 staff related costs of transition and $40.5 million in other costs, for example, harmonization of computer systems, office moves and studies to effect amalgamation of a number of service areas. At this point, funding of $10 million has been approved for the staff transition costs, which reduces the net requirements to $75.5 million. However, the Committee directed that other funding sources be explored to minimize the issuance of debt for transition costs. Further, the Committee indicated that financing will only be approved for those projects with a sound business plan and identifiable cost savings. Individual reports seeking specific authority to proceed on transition projects will come forward as required during the year through standing committees to the Budget Committee for consideration.

Previously Approved Capital Projects:

Previous Councils in prior years approved a variety of capital projects, which are in varying states of completion. The Budget Committee reviewed the projects shown in Appendices B and C for tax supported and rated supported capital programs, and recommended the cancellation of some (shown with a "C") and the reallocation against borrowing requirements of funding of $506 thousand. The Committee further recommended the deferral of a number of projects (denoted with a "D"), for consideration during the 1999-2003 Capital Budget process. These projects are more fully described in the report dated April 16, 1998 from the Chief Financial Officer and Treasurer, entitled "Previously Approved but Unstarted Capital Projects Further Report).

Summary of Budget Committee Review of 1998 Capital Requests:

The Budget Committee was presented with detailed capital budget requests which were consolidated from information prepared by each of the former seven municipalities. The Committee reviewed the requests, met with and received input from Community Councils, and also received input from the various Standing Committees of Council.

Below is a summary of the requests and changes recommended by the Budget Committee:









The major sources of change are as follows:

Impacts of Capital Budget on Operating Budget:

The capital budget impacts operating budgets in three ways:

(1) direct contributions to the capital program to reduce annual borrowing requirements ("capital from current");

(2) principal and interest payments on debt issued for capital purposes; and

(3) direct operating impacts of operating new or expanded facilities, e.g. salaries, maintenance costs, heat and hydro.

If the recommended capital program is adopted, then net 1998 debt charges will decrease by approximately $700 thousand from the 1997 aggregate level. Recommended increases to capital from current funding is addressed in a separate report dated April 16, 1998 from the Chief Financial Officer and Treasurer entitled "Proposed Capital Financing Management Plan and Other Capital Funding Issues", including an increase of $15 million recommended for 1998.

Preliminary figures indicate that the capital program will increase direct operating costs by approximately $1.5 million in 1998. This amount is included within the recommended Operating Budget.

Longer Term Capital Issues:

Challenges facing the City in the future will centre around funding strategies to offset the impact of Provincial downloading on the TTC, the increasing need to maintain aging infrastructure such as roads, bridges and buildings, and the potential but unknown capital needs of the following:

- GO Transit, the cost of which is being transferred to municipalities in the Greater Toronto Area from the Province;

- costs of upgrading and maintaining social housing, which is being transferred to the City from the Province; and

- possible capital costs for a replacement landfill site, once the existing Keele Valley site is closed.

To address these and other capital funding pressures, the City is continuing to closely examine all of its capital expenditures, and is also embarking on a review of available revenue sources. These may include the use of development charges across the City, sale of surplus City owned property and other assets, and alternative financing approaches.

Although there are factors which will increase the pressure on future capital budgets, the City is well positioned to deal with these problems. Debt levels are comparatively low, as confirmed independently through various organizations, and the City has at its disposal a variety of options to manage its capital program. The challenges will be to limit the level of capital borrowing to maintain the flexibility in the operating budget, address the TTC downloading issue, and maintain the City's sizeable investment in its assets for the future enjoyment of its residents, visitors and businesses.

Conclusions:

The information contained above summarizes the 1998 Capital Budget as recommended by the Budget Committee.

Contact Name:

W. A. Liczyk, Chief Financial Officer and Treasurer, 392-8773

25

1998 Operating Budget

(City Council, at its Special Meeting on April 29 and 30, 1998, considered Clauses Nos. 1 to 26, contained in Report No. 6 of The Strategic Policies and Priorities Committee, concurrently. Refer to page 3430 for Council's action.)

The Strategic Policies and Priorities Committee submits, without recommendation, the following report (April 23, 1998) from the Budget Committee:

Purpose:

To recommend the 1998 operating budget that represents a zero percent budget increase from 1997.

Financial Implications:

The adoption of a 1998 operating budget will provide funds for the delivery of City programs and services.

Recommendation:

It is recommended that the 1998 operating budget representing a zero percent budget increase be approved as presented in Appendices A and B, and that the 1998 gross expenditures of $5.6 billion, gross revenues of $3.0 billion and net expenditures of $2.6 billion contained therein be adopted for each specified department, board, agency and commission.

Discussion:

This 1998 operating budget was prepared with the basic principle of maintaining service levels at 1997 levels and with achieving a zero budget increase. The creation of the new City on January 1, 1998 did not allow for time to identify and assess each and every program and service and the level of service that would be appropriate for the new City. This has had tremendous impact on the City's ability to effect significant change in this year's budget process not only from a service perspective but also on the restructuring initiative. Work on restructuring has been initiated. However, service level rationalization is an exercise that needs to be done in 1998 in time for the 1999 operating budget.

Over the past several months, the Budget Committee has met to review in detail all the operating budgets of each department, agency, board and commission. The amalgamation of the seven former municipalities has posed major challenges like no other year in putting this 1998 operating budget together. This first budget for the City has come together as a result of a tremendous effort on the part of all Members of Council and staff.

There will be much work done over the next few months to improve the process and budget presentation for 1999. The Chief Administrative Officer and the Chief Financial Officer and Treasurer are committed to conducting various debriefing sessions to hear input on improving the process for 1999 and future years that will include Members of Council and staff.

The Budget Committee began the 1998 budget process by requesting that each program area prepare a detailed list of potential reductions that accumulated to a 15 percent total reduction. The Chief Administrative Officer was then requested to review the prepared lists and recommend a preliminary 1998 operating budget. The Budget Committee then began a detailed review of each and every reduction recommended by the Chief Administrative Officer. The Budget Committee accepted certain reductions, rejected others and made recommendations on additional items.

As noted in previous reports and presentations, the City originally faced $306 million in budget pressures. These pressures stemmed from two sources. In addition to the City pressures of $142 million; on December 12, 1998, the Province downloaded an additional $164 million in budget pressures for a total pressure of $306 million.

As a result of the Budget Committee reviews, $176 million was identified and applied against the total budget pressures leaving a net pressure of $119.0 million prior to consideration of the provincial offer of assistance. Budget Committee has addressed this remaining net pressure by using the provincial offer of assistance. The $50 million grant to cover specific transportation projects has been used to reduce temporarily the 1998 capital from current contribution. The $100 million interest-free loan has been flowed into the Employee Benefit Reserve Fund.. $69.0 million has been transferred into the operating budget from this reserve. This leaves $31.0 million of the $100 million loan which will be transferred to the Transition Project Reserve Fund to assist in funding the $85.5 million gross envelope of transition projects also recommended for approval by the Budget Committee.

The operating savings are identified in Appendix A. Appendix B summarizes gross expenditure revenues and net expenditures. It should be noted that the savings recommended by the Budget Committee in 1998 will result in additional savings of $33 million that will carryover to 1999. Appendix C identifies the proposed restructuring savings while Appendix D quantifies the savings that will carryover into 1999.

1999 and Beyond:

Because of the late start of amalgamation, much of the savings from restructuring could not be achieved beginning on January 1, 1998. As a result, in recommending the 1998 operating budget, the Budget Committee has created savings that will be available against the budget pressures of future years. The 1998 net pressure of $119 million is reduced by $33 million worth of savings that represent the 1999 impact of restructuring of the administration. These actions will be available in 1999 and effectively reduces the pressures to $86 million.

There will continue to be budget pressures that will have a significant impact on the 1999 operating budget. Wage pressures, continued assessment decline, costs of capital maintenance for City facilities, social housing are among the already identified potential costs. Balancing against this is the continued restructuring of the organization which is estimated to be $75 million. The City will continue to be in financial stress and continued decision making on service levels leading up to the 1999 operating budget which will likely require consideration of the City applying for the second $100 million loan in order to stabilize the tax rates of the City in 1999.

Contact Name:

W. A. Liczyk, Chief Financial Officer and Treasurer, 392-8773 .



26

Other Items Considered by the Committee

(City Council, at its Special Meeting on April 29 and 30, 1998, received this Clause, for information.)

(a) An Eviction Prevention Strategy for the City of Toronto

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 21, 1998) from the Budget Committee:

(April 21, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received a report (April 14, 1998) from the City Solicitor, on an eviction prevention strategy for the City of Toronto and reporting as requested as to the actions the City may take with respect to landlords who are abusing the process.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(b) Property Assessment and Tax Policy System Implemented by the Provincial Government - Preliminary Reports - Property Tax Relief for Low-Income Seniors and Low-Income Disabled Persons and Property Tax Rebates for Charitable and Similar Organizations

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 21, 1998) from the Budget Committee:

(April 21, 1998) from the Budget Committee advising that as a result of its meeting held on April 20, 1998, the Budget Committee advised the Assessment and Tax Policy task Force that:

(i) while it recognizes the problem, there are no funds available in the 1998 budget, or in the foreseeable future, that can accommodate any type of cancellation program for tax relief; and

(ii) therefore, if such a cancellation program is approved, it would likely create a need for a tax increase.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(c) Toronto Atmospheric Fund

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 21, 1998) from the Budget Committee:

(April 21, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received the report (April 20, 1998) from the Chief Financial Officer and Treasurer providing background information on the Toronto Atmospheric Fund and directed that the matter be considered in July.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(d) 1998 Operating Budget with 1997 Preliminary Operating Results

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 23, 1998) from the Budget Committee:

(April 23, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received the 1998 Operating Budget with 1997 preliminary operating results submitted by the Chief Financial Officer and Treasurer.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(e) Regent Park Community Health Centre - Grants

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 23, 1998) from the Budget Committee:

(April 23, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received the communication (April 15, 1998) from the Executive Director, Regent Park Community Health Centre, regarding concerns about grants for services and programs in the area served by the Regent Park Community Health Centre.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(f) Support of the Keele/Eglinton Business Improvement Area for Special Target Policing Funding

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 21, 1998) from the Budget Committee:

(April 21, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received the communications (April 15, 1998) from Councillor Frances Nunziata and (March 26, 1998) from Mr. Steve Tasses, Keele/Eglinton Business Improvement Area, regarding support for special target policing funding.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(g) Request for Establishment of Contingency Fund for Grants Programs

The Strategic Policies and Priorities Committee reports having forwarded to all Members of Council a transmittal letter (April 21, 1998) from the Budget Committee:

(April 21, 1998) from the Budget Committee advising that at its meeting held on April 20, 1998, it received the communication (April 14, 1998) from the Municipal Grants Review Committee, regarding the establishment of a contingency fund for grants programs.

(Previously circulated with the agenda for the Strategic Policies and Priorities Committee meeting held on April 28, 1998)

(City Council at its Special Meeting on April 29 and 30, 1998, had before it, during consideration of the foregoing Clauses, the following communication (April 27, 1998) from Councillor Joe Pantalone, Chair of the Urban Environment and Development Committee:

Recommendation:

It is recommended that the 1998 Capital Works Program - Transportation be amended by adding funds for:

1. Bridge Construction $ 1,530,000.00

2. F. G. Gardiner Expressway $ 2,000,000.00

5. Bridge Construction $ 1,350,000.00

6. Road Resurfacing $ 3,323,000.00

7. Traffic Control $ 400,000.00

9. Safety and Operational Improvements $ 500,000.00

Total: $ 9,103,000.00

Discussion:

The Urban Environment and Development Committee, when it considered the 1998 Capital Budget for the Transportation Department, was convinced that most, if not all, of this work was required. The Budget Committee is recommending that the $18,498,000.00 not be approved this year. (List of how the $18,498,000.00 was going to be spent, is attached).

Because of the financial crisis we find ourselves in, and as Chair of the Urban Environment and Development Committee, I have met with Mr. D. P. Floyd, the Interim Lead of Transportation to discuss what must be done in order to maintain the integrity of Toronto's regional road network, while, at the same time, looking for what could be deferred to future years.

The outcome of this discussion is that $9,395,000.00 could be deferred. This can be achieved as follows:

Item No. 4 (F.G. Gardiner Expressway) can be done in future years ($4,000,000 deferral)

Item No. 3 (Don Valley Parkway resurfacing, $2,3000,000.00) can be approved this year with payments occurring in 1999, by awarding the tender and accepting the lowest tender for payment to be made in 1999.

Items No. 8 and No. 10 for an additional $2,995,000.00 could also be deferred, according to Mr. Floyd.

I hope that Members of Council support this recommendation.)

(A copy of the attachment, referred to in the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clauses, the following report (April 23, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

To identify the financing options for the Toronto Harbour Commissioners' (THC) proposed fixed link project at the Toronto City Centre Airport and the financial implications of each option for the THC.

Financial Implications:

There are no immediate financial implications for the THC given that a recommended financing option has not been identified. Further analysis is required to quantify the financial impact of the fixed link project for both the THC and the City.

Recommendations:

It is recommended that:

(1) the Toronto Harbour Commissioners (THC) submit to the Chief Financial Officer and Treasurer a revised five-year business plan for the Toronto City Centre Airport as well as any supplemental financial analysis of preferred options; and

(2) the financing authority for the fixed link project in the recommended 1998 Capital Budget for the THC be deferred pending a report from the Chief Financial Officer and Treasurer respecting the financial implications of financing the fixed link capital project.

Council/Committee Reference:

During consideration of the THC's 1998 Capital Budget at its meeting of March 31, 1998, the Budget Committee requested the THC to report to the Chief Financial Officer and Treasurer on the various financing options for the fixed link project and the financial implications of each option for the THC. The Budget Committee also requested the Chief Financial Officer to report directly to Council at its meeting of April 28, 1998 regarding this matter.

Discussion:

The 1998 Capital Budget for the THC includes $8.089 million for the first of a two-phase project to construct a fixed link to the Toronto City Centre Airport. Phase 2 is projected for 1999 at a cost of $7.996 million resulting in a total capital cost of $16.085 million for this project.

The attached report (April 14, 1998) from the Toronto Harbour Commissioners identifies nine financing options for the fixed link project, noting that the goal for the THC is to select an option which minimizes their exposure to risk and their investment costs while allowing the greatest flexibility and control. The available options are identified below:

(1) Borrow from a Traditional Financial Institution;

(2) Borrow from an Alternative Institution such as a Pension Fund;

(3) Borrow from a Non-Traditional Financing Company;

(4) Debt Financing - Issue Financial Instrument;

(5) Enter Build, Operate and Transfer Agreement;

(6) Partnership with a Private Sector Firm;

(7) Tender the Naming Rights to the Bridge;

(8) Obtain Government Funding; and

(9) Self-Finance from Reserves.

In general terms, Options 1 through 5 are assumed by the THC to be mutually exclusive, where entering into one option precludes the THC to enter into one of the other options. Option 6 may require the THC to finance their share of the partnership. Options 7 and 8 would allow the THC to utilize funds while minimizing or eliminating the need for debt, while Option 9 may require supplementary financing.

Financial Implications for the THC:

Given that the THC is still considering all the available financing options, the financial implications of each option for the THC are speculative at this time. Only those options relating to borrowing or debt issuance have been quantified in a preliminary way as no supplemental analysis has been submitted to provide a business case for any of the above options.

For those options which require financing from a lender or debt instrument, calculations have been based on a 10-year amortization period and an interest rate of 8 percent resulting in borrowing/debt retirement costs ranging from $21.6 to $21.8 million. However, these estimates may change as a result of interest rates or financial instruments used or should the amortization period be extended to meet cashflow demands.

The financial implications of Options 5 through 8 are less clear as they are dependent upon the negotiated position achieved by the THC - this is particularly true for Options 5 and 6. The financial impact of Options 7 and 8 may be negligible for the portion of capital funded without financial obligation, however, it is unclear whether the THC would be successful in obtaining full financing for its project from either of these options thereby requiring the use of other financing mechanisms.



Option 9, where the THC would finance the project from its own reserves, would expose the THC to significant risk. While the THC indicates that the financial implication of this option would be the opportunity cost of the funds, the following should be noted:

(1) The THC funds its capital works programme and any unbudgeted deficits for the Toronto City Centre Airport and Ferry operations from their reserves. The opening balance as of January 1, 1998 was $11.7 million with a projected closing balance of $9.5 million, excluding any financing costs for the bridge project.

(2) The THC requires an operating subsidy of $2.8 million annually from the City to support its operations.

(3) The 1998 budgeted expenses for the Toronto City Centre Airport operation exceeds its budgeted revenues by $623,920.00.

Financial Implications for the City:

In 1994, approximately 500 acres of land in the eastern harbour were transferred from the THC to the City and the Toronto Economic Development Corporation (TEDCO) as they were deemed to be unnecessary for a restructured THC. In lieu of a lost revenue stream from this transfer, the City and the THC entered into a subsidy agreement which required the City to provide an annual operating subsidy to support the THC's restructured operations.

Since 1995, the City has been providing an operating subsidy of $2.8 million per annum, of which $2.386 million has been funded by TEDCO through its (non-tax supported) operating budget and $389,000.00 has been funded by way of the former City of Toronto's tax-supported operating budget.

The Subsidy Agreement also stipulates that the THC is responsible for funding its capital works programme from its reserves for the first five years of the Agreement after which time the City could be required to provide capital funding if required. After 1999, the City's financial obligations would be expanded and financial support could increase.

It is the THC's position that the City's financial obligations outlined in the City/THC Subsidy Agreement would not be revoked should the THC be designated a federal Port Authority under the new Canada Marine Act.

In view of the City's financial obligations under the City/THC Subsidy Agreement, the choice of financing options for the fixed link project could present financial implications for the City by way of direct funding for operations and capital works.





Conclusions:

The THC has identified nine financing options for construction of the fixed link to the Toronto City Centre Airport. While it has been assumed that Options 1 through 5 are stand-alone options, however, they may not be mutually exclusive. Rather, the THC may be required to use the financing options in combination with each other to meet its goal of minimizing risk and costs while ensuring flexibility and control.

The THC's financial analysis of each financing option is preliminary and speculative at this stage given that all options are currently being considered, as a recommended option has not been identified. Insufficient information has been provided to fully assess the implications of the bridge construction for both the THC and the City. A business case analysis which includes a business plan for the Toronto City Centre Airport as well as better costing of each financing option will best assist staff in determining the financial implications of the fixed link project for the THC as well as the City of Toronto.

It is recommended that the THC submit to the Chief Financial Officer and Treasurer a revised five-year business plan for the Toronto City Centre Airport as well as any supplemental financial analysis of preferred options. It is also recommended that the financing authority for the fixed link project in the recommended 1998 Capital Budget for the THC be deferred pending a report from the Chief Financial Officer and Treasurer respecting the financial implications of financing the fixed link capital project.

(A copy of the Toronto Harbour Commissioners' report, referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clauses, the following report (April 24, 1998) from Councillor Norman Gardner, Chairman, Toronto Police Services Board:

Recommendation:

It is recommended that the following report be received for information.

Council Reference/Background History:

At its meeting on April 23, 1998, the Toronto Police Services Board was in receipt of the following report (April 15, 1998)from Mr. Albert Cohen, Toronto Legal Department, headed "Authority of the Board, City Council and the Chief of Police Regarding Police Budgets".

"Recommendation:

It is recommended that the Board direct the City Solicitor to review Board By-law No. 100 to ensure its consistency with section 39 of the Police Services Act and prepare an amending by-law for consideration by the Board to remove any inconsistencies.

Background:

At its meeting held on March 26, 1998, the Board received a report from the Chief of Police respecting the 1998 operating budget and the results of the Toronto Budget Committee meeting held on March 11, 1998 (Minute No. 158/98 refers). In light of the report, the Board approved a number of motions including a request to the City Solicitor to provide an opinion "delineating the authority of the Board, the Chief and the municipal council as it pertains to the establishment and allocation of the Service's operating and capital budgets".

Discussion:

1. Relevant Statutory Provisions.

Section 39 of the Police Services Act (the "Act") sets out the respective statutory authority of the Board and City Council with respect to police budget matters. For convenience, the section is reproduced as Appendix "A" to this report.

A review of the section indicates that the Board must submit both operating and capital estimates to City Council showing separately the amounts required for the operation of the Service and the operation of the Board. City Council is required to review the estimates and establish overall operating and capital budgets for the Board. City Council is not obliged to adopt the estimates as submitted by the Board. However, in establishing the overall police budget, City Council cannot approve or disapprove specific items contained in the estimates.

Ultimately, if the Board is dissatisfied with the budget established by City Council for the reasons identified in subsection 39(5), it may request the Ontario Civilian Commission on Police Services to determine the adequacy of the budget. If requested to determine the matter, the Commission is required to do so, but only subsequent to conducting a hearing into the matter.

2. The Effect of Board By-law No. 100, The Accounts By-law.

Prior to examining the effect of Board By-law No. 100, the Board should note that current section 39 of the Act, reproduced in Appendix "A", was proclaimed into force on November 27, 1997. Prior to that date, former section 39 of the Act addressed the submission of a board's estimates to a municipal council for approval and it provided for the resolution of any conflict between a board and a council by the Commission. However, former section 39 did not contain a subsection equivalent to current subsection 39(4) which provides that a municipal council does not have the authority to approve or disapprove specific items in the estimates.

In light of former section 39, the Board enacted By-law No. 100 in 1991. Although the majority of the By-law deals with the forms of commitments that are permissible on behalf of the Board and the administration of the payment of accounts, there are a number of provisions in the By-law that address City Council's role in the establishment of police budgets. In particular, the following sections are contained in the By-law:

Subsection 2(2) - Subject to section 39 of the Act, Council has the sole authority to allocate funds to Board appropriations and projects.

Section 6 - The transfer of sums between appropriations or projects shall require the approval of the Board and the authorization of Council.

Given the recent enactment of current section 39 of the Act, the question arises as to the effect of the section on the application of the provisions of the By-law referred to above.

In my opinion, the wording of subsection 39(4) of the Act effectively invalidates the provisions contained in subsection 2(2) and section 6 of the By-law. Subsection 39(4) provides that a municipal council does not have the authority to approve or disapprove specific items in the estimates. Arguably, the Board cannot, through its By-law, confer on City Council the authority to engage in acts which are statutorily prohibited. As well, due to this prohibition, the Board is solely responsible for the approval or disapproval of specific items in the budget. Any delegation of this authority to City Council by way of by-law might constitute an improper delegation of the Board's authority under the Act. As a result, in my opinion, City Council is not legally authorized to engage in the approval of specific items in the police budget. In light of this, it is recommended that the City Solicitor review Board By-law No. 100 to ensure consistency with section 39 of the Act and prepare an amending by-law for consideration by the Board to remove any inconsistencies.

3. The Role of the Chief of Police.

The Act does not specifically address the Chief of Police's role in developing and establishing the estimates. The statute only speaks to the relationship between a board and a municipal council with respect to determining the budget. Nonetheless, Board By-law No. 100 requires the Chief to prepare the estimates for approval of the Board and submission for adoption by Council. Even in the absence of such provision in the By-law, as a practical matter, given the content of the estimates, the Chief would have to be actively involved in the preparation of the estimates for submission to City Council."

Conclusions:

The Board approved the foregoing and requested that a copy of this report be provided to the members of Toronto City Council for information.

Contact Name and Telephone Number:

Mr. Albert Cohen, Toronto Legal Department, Tel. No. 392-8041.





Appendix "A"

Police Services Act

Section 39

(1) The board shall submit operating and capital estimates to the municipal council that will show, separately, the amounts that will be required,

(a) to maintain the police force and provide it with equipment and facilities; and

(b) to pay the expenses of the board's operation other than the remuneration of board members.

(2) The format of the estimates, the period that they cover and the timetable for their submission shall be as determined by the council.

(3) Upon reviewing the estimates, the council shall establish an overall budget for the board for the purposes described in clauses (1)(a) and (b) and, in doing so, the council is not bound to adopt the estimates submitted by the board.

(4) In establishing an overall budget for the board, the council does not have the authority to approve or disapprove specific items in the estimates.

(5) If the board is not satisfied that the budget established for it by the council is sufficient to maintain an adequate number of police officers or other employees of the police force or to provide the police force with adequate equipment or facilities, the board may request that the Commission determine the question and the Commission, shall, after a hearing, do so.)

(City Council also had before it, during consideration of the foregoing Clauses, the following report (April 24, 1998) from Councillor Norman Gardner, Chairman, Toronto Police Services Board:

Recommendation:

It is recommended that the following report be received for information.

Council Reference/Background History :

At its meeting on April 23, 1998, the Toronto Police Services Board was in receipt of the following report April 23, 1998 from David J. Boothby, Chief of Police, headed "City Of Toronto Budget Committee, Recommendations from their Meeting of March 30, 1998".



Recommendations:

1. That the Board receive this report as the responses to the City of Toronto Budget Committee recommendations.

2. That the Board approve maintaining the five internal auditors, as outlined in the Budget Committee recommendations, within the domain of the Police Service.

3. That the Board advise City Council that no financial statements are prepared by the Service's Internal Audit Unit and therefore none will be forwarded to the City Auditor, the Chief Financial Officer and Treasurer, and the Audit Committee.

4. That the Board not change its Police Reference Check Program (PRCP) policy as approved on February 26, 1998, and advise City Council accordingly.

5. That the Board advise City Council that target policing in 1998 can only be implemented if additional funds are provided.

6. That the Board approve the revised Human Resources Strategy, which incorporates the Budget Committee's recommendation to increase front-line officers to 4,009 Constables and 915 Sergeants/Detectives, and that the Board advise City Council that additional funding is required to achieve these staff levels.

7. That the Board forward this report to Toronto City Council for their meeting of April 28, 1998.

Background:

The City of Toronto Budget Committee, at its meeting of March 30, 1998, in reviewing the Service's 1998 Operating Budget made various recommendations and requested further information to be forwarded to City Council. In total there are 11 items and the following provides the Service's response to each Budget Committee recommendation.

Item 1:

Recommendation: The Commissioner of Corporate Services is to review and rationalize the overall audit function for the new City including the Toronto Transit Commission and Police Service. Moreover, the Committee has directed that the City Auditor perform this function for the Service, and, as such, recommended that the Service's five internal auditors be deleted as of August 1, 1998. No savings are expected to be achieved during 1998 as a result of these deletions, since the employees would be subject to the Service's surplus policy, including severance packages.



Response: Provided in Attachment 1.

Item 2:

Recommendation: The Service is to discontinue charging non-profit organizations for Police checks of volunteers and employees. This could potentially affect the 1998 Estimate in that revenues which have been budgeted will not be achieved during the year.

Response: Provided in Attachment 2.

Item 3:

Recommendation: The $500 thousand additional charge to the Parking Enforcement Unit is not to be paid until such time as it has been reviewed by the Chief Administrative Officer for appropriateness. Any potential implications of this recommendation will be addressed in the Chief Administrative Officer's report.

Response: The Service's Finance staff is prepared to review the details for indirect cost charges to the Parking Enforcement Unit with the City CAO. The City has indicated that this review will occur in May or June, 1998 and a report prepared by them at that time. In the meantime, the Service will continue to charge the indirect costs as budgeted and make any required adjustments once the report is finalised.

Item 4:

Recommendation: The City Auditor is to review and report on the operations and profit margins of the Collision Reporting Centres.

Response: No response required by the Service.

Item 5:

Recommendation: Any statements prepared by the Service's internal audit unit are to be forwarded to the City Auditor, the Chief Financial Officer and Treasurer, and the Audit Committee.

Response: Provided in Attachment 1.

Item 6:

Recommendation: No further vehicles are to be ordered by the Service until such time as the Corporate Fleet Management Report is compiled by the Commissioner of Corporate Services.



Response: The Service's Fleet staff are working with the committee on various issues in compiling all of the fleet information. The Service will not order any vehicles until the report is completed and approval is given by the Budget Committee. However, if there is a delay which would not allow the Service to order vehicles by September, 1998, the vehicle replacement catch-up strategy will be significantly impacted necessitating a further assessment of options at that time.

Item 7:

Recommendation: The Special Fund line item (Board Special Fund) is to be reduced by 50%.

Response: To be provided by the Police Service's Board.

Item 8:

Recommendation: The Target Policing initiative is not to be undertaken in 1998.

Response: The target policing initiative was not a request of the Service in the original 1998 budget submission. At the request of City Councillor D. Fotinos and supported by Councillor F. Nunziata, the Service prepared a plan and costing to implement target policing in 1998. This plan indicated that additional funding of $2.5 million would be required in 1998 and an annualised amount of $6 million in 1999. The Board supported this initiative for 1998 if additional funding was made available. The Service cannot undertake this initiative without additional funding. Therefore, it is recommended that the Board advise City Council that target policing will only be implemented if additional funding is provided.

Item 9:

Recommendation: The Chief Administrative Officer and Treasurer is to report with respect to the impact on the 1999 Operating Budget of the Committee's previous directive to increase front-line Officers to the level of 4,009 Constables and 915 Sergeants/Detectives over the term of the current City Council (see item 10 below).

Item 10:

Recommendation: The Service is to develop a plan to increase the number of front-line Officers and direct supervisors (e.g., Constables, Sergeants/Detectives) to the December, 1994 levels of 4,009 and 915 respectively by the end of the current term of Council.

Response to items 9 and 10: Provided in Attachment 3.

Item 11:

Recommendation: The Chief Administrative Officer and the Chief Financial Officer are to report with respect to a Corporate policy regarding the funding of severance packages, and are to discuss with Police staff the issue of budget document presentation.

Response: No response from the Service is required on the first part of the recommendation. Service staff will meet with the City Finance staff on the issue of the budget document for the 1999 process.

The Command Officers and I will be present at the Board meeting of April 23, 1998 to respond to any questions.

Conclusions:

Dana Styra, Manager, Internal Audit and Program Review, was in attendance and responded to questions by the Board about this report.

The Board approved the following Motions:

(1) That with regard to Recommendation No. 1 of the foregoing report, the Board approve the report subject to the amendments noted below rather than receive it;

(2) That Recommendation Nos. 2, 4, 5, 6 and 7 be approved as submitted;

(3) That Recommendation No. 3 be amended to read as follows:

"That the Board advise City Council that the Internal Audit and Program Review Unit undertakes operational audits. The unit does not prepare any financial statements. Reports of the findings, along with recommendations pertaining to audits and reviews, are under the jurisdiction of the Board and are submitted to the Board in in-camera sessions for their review and approval.";

(4) That, with regard to Item No 1 pertaining to the recommendation that the Toronto Police Service's five internal auditor positions be deleted as of August 1, 1998, the Board advise Toronto City Council that Council does not have the authority to recommend staffing reductions and draw its attention to section 40 of the Police Services Act which directs that terminations of employment for the purpose of abolishing the police force or reducing its size can only be initiated by the Board and has to have the consent of the Ontario Civilian Commission on Police Services; and

(5) That, with regard to Item No. 4 pertaining to the recommendation that the City Auditor review and report on the operations and profit margins of the Collision Reporting Centres, the Service's response should be amended to read as follows:

"This is a contract arrangement between the Police Services Board and a private operator and there is no provision in the contract for the operator to disclose financial information.".

Contact Names and Telephone Numbers:

Dana Styra, Manager, Internal Audit and Program Review, 808-7789; and

Frank Chen, Director of Finance and Administration, 808-7876.)

(A copy of the following Attachments, referred to in the foregoing report, are on file in the office of the City Clerk:

- Attachment 1, which provides a response to Items Nos. 1 and 5;

- Attachment 2, which provides a response to Item No. 2; and

- Attachment 3, which provides a response to Items Nos. 9 and 10.)

(City Council also had before it, during consideration of the foregoing Clauses, the following report (April 28, 1998) from Councillor Norman Gardner, Chairman, Toronto Police Services Board:

The first few months of the new City of Toronto Council have certainly been busy, not only because of the amalgamation, but certainly aggravated by the provincial down loading.

With regard to the Toronto Police Service Budget, last year's actual spending was $506 million. The Police Service had a settlement of $14 million, thrust upon them by an arbitration agreement, making the total budget $520 million.

The Police asked for $515 million therefore giving up $5 million in various cuts, however, the Budget Committee has recommendation $510.8 million, leaving the Police $4.1 million short of its request.

The Police have made very effort to meet budgets in the past and, unfortunately, when budgets have been cut too deep, the need to go to contingency has taken place.

The Police budget has decreased continuously since 1992, when it was $560.5 million and the Service had 5,616 officers:

- 1993, $560.0 million ($0.5 million less than 1992);

- 1994, $499.8 million ($60.2 million less than 1993);

- 1995, $503.5 million ($3.7 million more than 1994 for community grant);

- 1996, $493.5 million ($10 million less than 1995); and

- 1997, $495.3 million ($1.8 million more than 1996).

Today there are less than 5,000 officer compared to 5,616 officers in 1992. The 1997 net budget was approved for $495.3 million but $508.8 million was actually spent, including an arbitration award of $14 million to Service members.



The 1998 request for $515 million is $6.2 million higher than 1997 spending levels (or a 1 percent increase). This $6.2 million includes the annualized impact of the arbitration award, as well as the start up costs for the civilianization of the Mugshot System, and operating impacts arising from approved capital investment.

The 150 officers we wish to recruit hardly replace the officers we lose to attrition.

At the request of Councillors Fotinos and Nunziata the Police provided the Budget Committee with a target policing cost evaluation of $2.5 million.

The Police endorse Target Policing for a good many reasons, one being, it is an inexpensive way to deal with high crime areas if done at critical, but capped times, when there is the most need.

Many communities are crying for more Target Policing because of previously successful results in Parkdale and Regent Park.

Due to cuts to budget and personnel, and as a result of officers attending court to testify while on duty, there have been days when few if any cars are available in our divisions.

Many of you have had your constituents talk to you about the need for more police visibility, and the budget requests represents what is felt needed to provide a level of security and Policing to meet the needs of a city of 2.4 million residents, and another .5 million people a day who work and visit the city.

I would be pleased to answer any question you might have.)

(City Council also had before it, during consideration of the foregoing Clauses, the following communication (April 24, 1998) from the General Manager, Toronto Zoo:

On March 23 and 24, 1998, the Urban Environment and Development Committee, in considering the Operating Budget for the Toronto Zoo, requested that the Zoo Board of Management submit comments to the Budget Committee concerning the Budget Committee's recommended budget reduction for the Zoo ($188.0 thousand) and the Budget Committee's interest in maintaining current admission prices at the Zoo for the 1998 year.

The Zoo Board of Management considered this item at its meeting on April 9, 1998. The Board of Management reluctantly accepted the recommended budget reduction. Further, the Board discussed the admission fee structure and is aware of the Budget Committee's concerns. The Board has no plans at this time to increase admission fees to the Zoo in 1998.)

(City Council also had before it, during consideration of the foregoing Clauses, the following communication (April 28, 1998) from Councillor Pam McConnell, Don River:

Building a new City isn't easy. With so many different histories and so many different practices it is hard to bring it all together. It can never be too soon to begin that process. This budget year, with the benefit of a grant from the Province, we are able to begin that process through a Community Investment Fund.

By accepting $150 million from the Province of Ontario this year, and accepting the many savings found by the Budget Committee, the City has $33 million unspent. I propose that Council take half of that money, $16.5 million, and invest it in communities to help provide every corner of our new City with the best practices available.

Let's bring the user fees for people in Etobicoke down, let's bring access to recreational facilities in York up, let's give equal access to dental services for children in Scarborough. $16.5 million won't equalize services across the new City, but it begins to share the benefits a little more equally.

I think that's a worthy effort. As we come together as a bigger City we need to invest in all of our communities, and we need to find the best ways to make our communities healthy, safe and prosperous.

I realize that this proposal comes at the eleventh hour, but I believe it is a good start at bringing the benefits of our new City to everyone, and I hope I will have your support for the enclosed motion.)

(City Council also had before it, during consideration of the foregoing Clauses, the following communication (April 29, 1998) addressed to Councillor Howard Moscoe, from the Chief Financial Officer and Treasurer:

A quick survey of the former Municipalities in the City of Toronto indicate that the total contributions made to various organizations in 1997 for corporate membership was $521,000.00 exclusive of the Police and Toronto Transition Commission.

$

East York 16,500.00

Etobicoke 45,000.00

Scarborough 56,100.00

North York 10,800.00

York 8,900.00

Toronto (former) 49,800.00

Metro 333,900.00

Total City of Toronto 521,000.00



Please note that this does not include membership dues paid by the corporation for individual employees with professional designation that may be required for the performance of their job.)

(City Council also had before it, during consideration of the foregoing Clauses, the following communication (April 22, 1998) from the City Clerk:

Recommendation:

The Audit Committee recommends that the attached letter (March 3, 1998) from the City Auditor to Mr. Kirk Shearer, President and CEO of the Metropolitan Toronto Convention and Visitors Association be considered in conjunction with the Grant to the Metropolitan Toronto Convention and Visitors Association (Tourism Toronto) referred to in the 1998 Operating Budget.

At its meeting held on April 21, 1998, the Audit Committee had before it a report (April 2, 1998) from the City Auditor attaching a copy of his letter (March 3, 1998) to Mr. Kirk Shearer, President and CEO of the Metropolitan Toronto Convention and Visitors Association, containing comments on systems and procedures arising from the 1997 audits of the Association.

Mr. Murray Vaughan, Vice President, Finance and Administration, Metropolitan Toronto Convention and Visitors Association, attended the meeting.

The Audit Committee directed that a copy of the aforementioned management letter be forwarded to Council for consideration in conjunction with the grant to the Metropolitan Toronto Convention and Visitors Association (Tourism Toronto) referred to the 1998 Operating Budget.

The Audit Committee advises that it has deferred consideration of the management letter until its next meeting to be held on May 21, 1998, pending receipt of a written response from the President and CEO of the Metropolitan Toronto Convention and Visitors Association.

(Report dated April 2, 1998,

addressed to the Audit Committee

from the City Auditor.)

Recommendation:

It is recommended that the Management letter of the Metropolitan Toronto Convention and Visitors Association dated March 3, 1998, be received for information.

Background:

As directed by the former Metropolitan Council, we are forwarding a copy of our management letter addressed to the President and CEO, containing comments on systems and procedures arising from the 1997 audits of the Association.

Contact Name and Telephone Number:

Jerry Shaubel, 392-8462.)

(A copy of the Management letter (March 3, 1998), referred to in the foregoing report, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clauses, the following communication (April 6, 1998) from the City Clerk:

The Toronto Community Council, on April 1, 1998 had before it a report (March 10, 1998) from Mr. Peter Clutterbuck, Co-Director, CSPC and Chair of Community Voices of Support, respecting Community Social Planning Council of Toronto.

The following persons appeared before the Toronto Community Council in connection with the foregoing matter:

- Ms. Shannon Wiens, Community Voices of Support, c/o Community and Social Planning Council of Toronto;

- Ms. Susan Neal, Executive Director, Eastview Neighbourhood Community Centre;

- Ms. Pam Jolliffe, Executive Director, Fred Victor Centre; and

- Ms. Shawnne Soong, Canadian Red Cross, Central Toronto.

The Toronto Community Council recommended to City Council, for its meeting scheduled for consideration of the Capital and Operating Budgets, that the Toronto Police Service not charge non-profit organizations for criminal records checks.)

(A copy of the communication (March 10, 1998) from Mr. peter Clutterbuck, Co-Director, CSPC and Chair of Community Voices of Support, which was attached to the foregoing communication, is on file in the office of the City Clerk.)

(City Council also had before it, during consideration of the foregoing Clauses, a communication (April 29, 1998) addressed to the Chief Administrative Officer from the City Solicitor respecting the proposal being considered by City Council to accept a loan from the Province to meet a shortfall in the 1998 operating budget, and providing a legal opinion with respect thereto.)

(City Council also had before it, during consideration of the foregoing Clauses, a News Release (January 5, 1998) issued by the Ministry of Municipal Affairs and Housing, headed "Province Confirms Toronto Transition Support", wherein it states that the Province has confirmed that it will provide the City of Toronto with a $100 million interest-free loan, and that additional financing of up to $100 million, also interest-free, could be available in 1999, if required.)



(City Council also had before it, during consideration of the foregoing Clauses, the following tables:

(i) (April 30, 1998), headed "Status of 1998 Capital Program as Currently Recommended by Council, Up to and Including April 29, 1998", prepared by the Chief Financial Officer and Treasurer;

(ii) (undated), headed "1998 Current Budget, Summary of Council Budget Adjustment Motions"; and

(iii) (March 17, 1998) submitted by Councillor David Shiner, Seneca Heights, headed "City of Toronto Parks and Recreation, 1998 Capital Program".)

(City Council also had before it, during consideration of the foregoing Clauses, the following documentation:

(a) (April 28, 1998) communication from Councillor David Shiner, Seneca Heights, submitting a table (March 9, 1998), headed "1998 Capital Works Program - Status of Reviews, Tax Supported", and a copy of correspondence (April 23, 1998) from the Interim Functional Lead, Transportation, respecting audible pedestrian signals;

(b) (April 21, 1998) communication submitted by Councillor David Miller, High Park, from Dr. P. Shore, Chairman, Toronto Advocacy Committee of the Canadian National Institute for the Blind, in support of funding for the installation of audible pedestrian signals;

(c) communications submitted by Councillor Frances Nunziata, York - Humber, in support of funding for target policing:

(i) (April 12, 1998) addressed to Councillor Tom Jakobek, East Toronto, from Ms. B. Spyropoulos, Chair of the Community Police Liaison Committee, Toronto Police Service, 12 Division;

(ii) (April 15, 1998) from Ms. D. Lombard, Toronto; and

(iii) (March 26, 1998) addressed to Councillor Tom Jakobek, East Toronto, from Mr. S. Tasses, Keele/Eglinton Business Improvement Area (BIA), forwarding a copy of a petition signed by 88 members of the BIA;

(d) (April 28, 1998) communication from the Committee Administrator, Committee on the Status of Women, regarding pressures facing subsidized Child Care Programs, urging City Council to develop comprehensive capital strategies that would provide ongoing funding for child care services and submitting recommendations in this regard;



(e) (April 14, 1998) communication from the Director, Community and Tenant Services, Metropolitan Toronto Housing Authority, forwarding the Authority's submission in support of children's services and programs; and

(f) communications from various individuals and/or organizations submitting comments regarding the 1998 Budgets:

- (April 27, 1998) from Ms. K. Buck, Toronto;

- (April 24, 1998) from Mr. B. Young, Project Co-ordinator, Toronto Renewable Energy Co-operative;

- (April 20, 1998) from Mr. G. Martin, Chair, Audible Pedestrian Signals Advisory Group;

- (April 20, 1998) from Mr. J. Purnell, North York;

- (April 20, 1998) from Ms. E. Sidhu, Head of English Department, Eastdale Collegiate Institute;

- (April 16, 1998) from Ms. A. Grafstein and Mr. D. Zapparoli, Co-Chairs, Metro Child and Youth Coalition;

- (April 15, 1998) from Ms. S. Seaborn, STREET Helpline Co-ordinator, Community Information Toronto;

- (April 14, 1998) from Ms. Darlene Clarke, Executive Director, Youth Clinical Services, Inc.

- (April 13, 1998) from Ms. M. Jackson, Toronto;

- (April 9, 1998) from Ms. Gina Severino, Acting Chair, Black Creek Business Area Association;

- (April 2, 1998) from Ms. M. Lynch, Community Support Worker, AIS Inc.;

- (April 1, 1998) from Ms. A. Wainberg, Manager, Women's Residence;

- (March 31, 1998) from Mr. N. Levine, Acting Dean, Faculty of Dentistry, University of Toronto;

- (March 23, 1998) from Ms. T. Dang, Toronto;

- (March 24, 1998) from Mr. D. Littman, Executive Director, Parkdale Activity - Recreation Centre;

- (March 24, 1998) from Dr. H. MacDougall, Associate Professor, Department of History, University of Waterloo;

- (March 20, 1998) from Ms. S. Longley, Executive Director, Red Door Shelter;

- (March 20, 1998) from Ms. G. MacKay, Coordinator and Mr. K. Denny, Community Health Worker, Health Resource & Wellness Centre;

- (March 19, 1998) from Ms. R. Edoghamhen, Program Director, Metro Street Focus Organization;

- (March 19, 1998) from Dr. R. K. Heyding, Leaside Health Centre;

- (March 16, 1998) from Ms. V. A. Gerber, Yorkminster Park Baptist Church;

- (March 4, 1998) from Mr. D. Weisbrod, Medical Student, University of Toronto;

- (undated) from Ms. T. Huu, Toronto;

- (undated) from Ms. C. Wong, Director, Community Development and Social Services Department, University Settlement Recreation Centre; and

- Petitions, containing 62 signatures, in opposition to proposed cuts to Public Health Programs.)

(Councillor Ashton, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to Children's Services and employee salaries and benefits, in that:

(i) his daughter is registered in a non-profit child care centre; and

(ii) his wife is an employee of the Building Division of the Urban Planning and Development Services Department.)

(Councillor Balkissoon, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to employee salaries and benefits in that several members of his family are employees of the City of Toronto.)

(Councillor Cho, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the Council budget, in that his wife is employed as his Constituency Assistant.)

(Councillor Fotinos, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to Children's Services, in that his mother provides private home child care.)

(Councillor Gardner, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the Council budget, in that a member of his office staff is a relative.)

(Councillor Kelly, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the Council budget, in that his wife is employed as his Executive Assistant.)

(Councillor Mihevc, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the Parks and Recreation budget, in that his son is an employee of the Parks Division.)

(Councillor Pantalone, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to Children's Services, in that his children are registered in a child care centre which has a purchase of service agreement with the City of Toronto.)

(Councillor Shiner, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the Council budget, in that a member of his office staff is a relative.)

(Councillor Walker, at the Special Meeting of City Council on April 29 and 30, 1998, declared his interest in those portions of the foregoing Clauses pertaining to the budget of the Toronto Harbour Commissioners, as it applies to the outer harbour marina, in that his daughter is a summer student attendant at the marina.)



Respectfully submitted,

MEL LASTMAN,

Chair

Toronto, April 14 and 28, 1998



(Report No. 6 of The Strategic Policies and Priorities Committee, including additions thereto, was adopted, as amended, by City Council at its Special Meeting on April 29 and 30, 1998.)

 

   
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