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TABLE OF CONTENTS

REPORTS OF THE STANDING COMMITTEES

AND OTHER COMMITTEES

As Considered by

The Council of the City of Toronto

on June 3, 4 and 5, 1998

STRATEGIC POLICIES AND PRIORITIES COMMITTEE

REPORT No. 9

11982 Queen Street East 7th Wave Bistro (Ward 26 - East Toronto)

2Use of Trademark PATH

3Appointments to the Boards of Management for Business Improvement Areas and Amendments to the (former Toronto) Municipal Code Chapter 20, Business Improvement Areas- Various Wards

41998 BIA Operating Budgets

5Terms of Reference - Harmonization of Services

6Harmonization of User Fees for Recreation Programs

71998 Operating and Capital Budget - Parks and Recreation Program

8Property Acquisition for Parkland - Canada Lands Company- Scarborough Bluffs (Ward 13)

9Acquisition of Former Landfill Site Owned by the Ministry of Transportation - Ward 16 - Scarborough Highland Creek

10Income Sharing Arrangement with theToronto Parking Authority

11Toronto Transit Commission - Procurement ofReplacement Subway Cars

12Other Items Considered by the Committee



City of Toronto

REPORT No. 9

OF THE STRATEGIC POLICIES AND PRIORITIES COMMITTEE

(from its meeting on May 29, 1998,

submitted by Mayor Mel Lastman , Chair)

As Considered by

The Council of the City of Toronto

on June 3, 4 and 5, 1998

1

1982 Queen Street East 7th Wave Bistro

(Ward 26 - East Toronto)

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends that the confidential report dated May 13, 1998, from the Commissioner of Urban Planning and Development Services respecting 1982 Queen Street East 7th Wave Bistro, which was forwarded to Members of Council under confidential cover, be received, such reports to remain confidential in accordance with the provisions of Section 55(9) of the Municipal Act..

--------

No one addressed the Committee in connection with this matter.

2

Use of Trademark PATH

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the report (May13, 1998) from the Commissioner of Economic Development, Culture and Tourism.

The Strategic Policies and Priorities Committee advises that it has requested the Commissioner of Economic Development, Culture and Tourism to investigate opportunities to involve the private sector and benefitting businesses in assuming the costs of the City of Toronto's underground walkway system currently being borne by the municipality.

The Strategic Policies and Priorities Committee submits the following report (May13, 1998) from the Commissioner of Economic Development, Culture and Tourism:

Purpose:

This report recommends that the City of Toronto consent to the adoption, use and registration of the trademark PATH by The Young Consulting Group Inc. a Vancouver based management consulting firm. Council approval is required since the City is the owner of the official mark PATH which identifies the downtown underground walkway system.

Source of Funds, Financial Implications and Impact:

No funding is required and there are no financial implications for the City of Toronto.

Recommendations:

That the City of Toronto consent to the registration of PATH as a trademark by The Young Consulting Group Inc. subject to the applicant's agreeing that the trade mark for which consent has been sought will not be used in any design form which is confusingly similar to the design forms used by the City of Toronto, including any similar typeface.

Council Reference/Background/History:

The former Corporation of the City of Toronto was the owner of the following official marks pursuant to section 9 of the Trade Marks Act which identify the underground walkway system in downtown Toronto: PATH, P.A.T.H. & Design, PATH & Design, INSIDE PATHWAYS, INSIDE PASSAGE, THE PATHWAY, PATH DOWNTOWN WALKWAY and Design, DOWNTOWN WALKWAY and PATHWAY SYSTEM.

Subsection 9(1) of the Trade Marks Act provides that no person shall adopt in connection with a business, as a trademark or otherwise, any mark consisting of, or so nearly resembling as to be likely to be mistaken for any badge, crest, emblem or mark adopted and used by any public authority in Canada as an official mark for wares or services. Subsection 9(2) of that Act provides that nothing in the section prevents the adoption, use or registration of a trade-mark or otherwise, in connection with a business, of any mark described in subsection 9(1) with the consent of the public authority which was intended to be protected by the section. It is this requirement for consent that has generated the following request.

The City has received a request from The Young Consulting Group Inc., a British Columbia management consulting firm specializing in the health care and non-profit sectors to provide its consent to that company's adoption and use of the trademark PATH in association with a Performance Assessment Tool for Healthcare. Performance Assessment Tool for Healthcare assists decision making bodies who must have accurate information upon which to make their decisions and to involve and investigate multiple-site, multiple-service situations where clarity of the facts and perceptions can lead to evidence-based decisions.

The City's consent has been requested to enable The Young Consulting Group Inc. to use and register the trademark PATH. Since it is unlikely that anyone would associate a Performance Assessment Tool for Healthcare with the City's official mark PATH, it is our view that the City could reasonably give its consent. Under the circumstances and in view of the proposed use of the trademark we do not recommend that a fee be charged for the use of the mark, nor do we recommend any limitations on it's use. We do, however, recommend that as a condition of the consent being given that the applicant be required to agree that the trademark will not be used in any design form which is confusingly similar to the design forms used by the City of Toronto, including any similar typeface.

We have consulted with the City Solicitor in the preparation of this report.

Contact Name:

George Spezza: phone: 392-6904, fax: 392-0675, E-mail: gspezza@city.toronto.on.ca.

3

Appointments to the Boards of Management for Business

Improvement Areas and Amendments to the (former Toronto)

Municipal Code Chapter 20, Business Improvement Areas

- Various Wards

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the following report (May 27, 1998) from the Commissioner Economic Development, Culture and Tourism:

Purpose:

Changes to membership of Boards of Management for Business Improvement Areas require Council approval and a by-law amendment. Attached is Schedule A detailing the amendments to (former Toronto) Municipal Code, Chapter 20 and Appendix 1 listing the names of the nominees to be appointed.

Source of Funds:

No funds required. Business Improvement Area operating budgets are raised by a special levy on members and will be brought forward in a separate report for approval.

Recommendations:

"It is recommended that:

(1)in accordance with the elections held at the Business Improvement Area Annual General Meetings, amendments be made to Schedule A Individual Boards of Management, of the (former Toronto) Municipal Code Chapter 20, Business Improvement Areas as set out in the attached Schedule A. These changes are specific to Number of Members and Members Needed for Quorum and are highlighted by "Changes From and To";

(2)Council appoint the nominees listed in Appendix 1 of this report to the Boards of Management for Hillcrest Village, Long Branch and Village of Islington Business Improvement Areas. The term of office is to expire on November 30, 2000, or as soon thereafter as successors are appointed. Each of the named nominees meets the requirements of Section 220 of the Municipal Act, as amended by Bill 106.

(3)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto."

Comments:

Following the election held at the Annual General Meeting of Hillcrest Village Business Improvement Area, amendments are required to the number of members and members needed for quorum. These amendments must be reflected in Schedule A Individual Boards of Management of the (former Toronto) Municipal Code Chapter 20, Business Improvement Areas.

Following the elections held at the Annual General Meetings of Long Branch and Village of Islington Business Improvement Areas and as per Councils resolution at it's meeting of February 5 & 6, 1998, attached in Appendix 1 are the nominations for appointments to other Business Improvement Areas Boards of Management in the former Area Municipalities.

Conclusions:

These amendments should be reflected in Schedule A, Individual Boards of Management of the (former Toronto) Municipal Code Chapter 20, Business Improvement Areas.

The nominees listed in Appendix 1 of this report should be appointed to the Business Improvement Area, Boards of Management. The terms of office are to expire on November 30, 2000, or as soon thereafter as successors are appointed. Each of the named nominees meets the requirements of Section 220 of the Municipal Act, as amended by Bill 106.

--------

SCHEDULE A

Business Improvement Areas

Individual Boards of Management

Name ofBy-lawMembers

Business WhichNumberCouncil MembersNeeded

ImprovementDesignatesofFor

AreaAreaMembersNumberWardQuorum

ChangedChanged

FromToFrom To

Hillcrest

Village808-8387 1Davenport44

--------

Appendix 1

Hillcrest Village BIA

Cathy LawesToronto Dominion Bank

687 St. Clair Ave. W.

Toronto, Ont. M6C 1B2

Luigi SabatiniOrizzonte Restaurant

760 St. Clair Ave. W.

Toronto, Ont. M6C 1B5

Santo Carino760 St. Clair Avenue W.

Toronto, Ont. M6C 1B5

Joseph LupoJoseph's

806 St. Clair Ave. W.

Toronto, Ont. M6C 1B6

Tony Diodati Churrasco of St. Clair

679 St. Clair Ave. W.

Toronto, Ont. M6C 1A7

Santo BozzoSanto's Hair Stylist

804 St. Clair Ave. W.

Toronto, Ont. M6C 1B6

Long Branch BIA

Dietmar LeinLein's Deli

3262 Lakeshore Blvd. W.

Toronto, Ont. M8V 1M4

Carl PorrittH. G. Porritt Real Estate Inc.

3399 Lakeshore Blvd., W.

Toronto, Ont. M8W 1N2

Liz PorrittH. G. Porritt Real Estate Inc.

3399 Lakeshore Blvd., W.

Toronto, Ont. M8W 1N2

Phil BakerLakeshore Accounting

3421 Lakeshore Blvd., W.

Toronto, Ont. M8W 1N2

Patricia LukasewichLawyer's Office

3386 Lakeshore Blvd., W.

Toronto, Ont. M8W 1M9

George DimogerontasGreek Texan Bar & Grill

3235 Lakeshore Blvd., W.

Toronto, Ont. M8V 1M2

Anne Marie HopkinsLakeshore Cycle & Sports

3451 Lakeshore Blvd., W.

Toronto, Ont. M8W 1N2

George KokosielisThe Bridge Port Restaurant

3473 Lakeshore Blvd., W.

Toronto, Ont. M8W 1N5

Mike WiltonGolf-To-A-Tee

3541 Lakeshore Blvd. W.

Toronto, Ont. M8W 1P4

Village Of Islington BIA

Stuart HillsTurner & Porter

Butler Chapel

4933 Dundas St. W.

Toronto, Ont. M9A 1B6

Rick GenioleRicci Salon

4868 Dundas St. W.

Toronto, Ont. M9A 1B6

Jon C. ParryEdward D. Jones & Co.

4889 A Dundas St. W.

Suite # 4

Toronto, Ont. M9A 1B2

Kathleen YeomanDewar Graham

4889 Dundas St. W.

Toronto, Ont. M9A 1B2

Eric TettmarThe Precinct

4946 Dundas St. W.

Toronto, Ont. M9A 1B7

John AlkinsAlkins Real Estate Ltd.

4872 Dundas St. W.

Toronto, Ont. M9A 1B5

4

1998 BIA Operating Budgets

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of Recommendations (1) and (2) in the report (May 14, 1998) from the Chief Financial Officer and Treasurer.

The Strategic Policies and Priorities Committee reports, for the information of Council, having concurred with Recommendation No. (3) in the report (May 14, 1998) from the Chief Financial Officer and Treasurer, that

"(3)a copy of this report be forwarded to the Budget Committee for its information.".

The Strategic Policies and Priorities Committee submits the following report (May 14, 1998) from the Chief Financial Officer and Treasurer:

Purpose:

Approval of Business Improvement Area (BIA) annual budgets is required by Council as per Section220 of the Municipal Act as amended by Bill 106.

Source of Funds:

No City funding is required since Business Improvement Area operating budgets are raised by a special levy on members.

Recommendations:

It is recommended that:

(1)the Strategic Policies and Priorities Committee certify to City Council the expenditure estimates of the following Business Improvement Areas for the year 1998, in the following amounts:

$

Bloordale Village58,000

Gerrard India Bazaar40,000

Harbord Street26,000

Parkdale Village115,500

Queen/Broadview Village39,000

St. Lawrence Neighbourhood70,000

Upper Village127,900

(2)the expenditure estimates of the above Business Improvement Areas be adopted; and

(3)a copy of this report be forwarded to the Budget Committee for its information.

Comments:

The budget approval process for BIA budgets is as follows. Each BIA submits a budget which has been approved by the members and the Board of Management to the BIA Office. As with all agency budgets, the Finance Department reviews the budget and submits it to this committee for recommendation to Council for adoption. Once the budgets have been approved, the funds are raised by the City by a special levy on the businesses within the bounds of the business improvement area.

The first group of BIA budgets was approved by Council at its meeting of May13, 1998. This is the second group. The rest of the BIA budgets will be forwarded to you as they are submitted. Appendix B contains the full list of all 39 BIAs and where the budget is in the approval process.

The following Business Improvement Areas held meetings on the noted days at which the budgets (see Appendix A) were approved:

Approved ByApproved By

Members Board of Management

Bloordale VillageApril 14, 1998April 14, 1998

Gerrard India BazaarFebruary 26, 1998February 26, 1998

Harbord StreetDecember 10, 1997December 10, 1997

Parkdale VillageJanuary 19, 1998January 19, 1998

Queen/Broadview VillageApril 29, 1998April 29, 1998

St. Lawrence NeighbourhoodApril 16, 1998April 16, 1998

Upper VillageApril 22, 1998April 22, 1998

The following tables adjust the gross budgets to arrive at net budgets for special levying purposes for these Business Improvement Areas:

19971998 Budget

Budget Request

$$

Bloordale Village:

Expenditure Estimates30,03058,000

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0(20,000)

Net Expenditure Budget30,03038,000

Gerrard India Bazaar:

Expenditure Estimates40,00040,000

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0 0

Net Expenditure Budget40,00040,000

Harbord Street:

Expenditure Estimates22,50026,000

Miscellaneous Revenue00

BIA's Prior Year

(Surplus)/Deficit 0(3,500)

Net Expenditure Budget22,50022,500

Parkdale Village:

Expenditure Estimates96,000115,500

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0(19,500)

Net Expenditure Budget96,00096,000

Queen/Broadview Village:

Expenditure Estimates26,00039,000

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0(13,000)

Net Expenditure Budget26,00026,000

St. Lawrence Neighbourhood:

Expenditure Estimate50,00070,000

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0(20,000)

Net Expenditure Budget50,00050,000

Upper Village:

Expenditure Estimates135,000127,900

Miscellaneous Revenue00

BIA's Prior Years

(Surplus)/Deficit 0 0

Net Expenditure Budget135,000127,900

Contact Name:

Donald Altman, telephone: 392-1529; fax: 392-6963

Internet e-mail: daltman@city.toronto.on.ca

Ingrid Girdauskas, telephone: 392-1134; fax: 392-0675

Internet e-mail: igirdaus@city.toronto.on.ca

--------

Appendix A

Operating Budget of the Bloordale Village BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus20,76630,03058,000

Expenditures:

Administration2,565730750

Capital4,64915,00045,500

Maintenance1,2439,0007,900

Promotion and Advertising7,2535,3003,850

Contingency 0 0 0

Total Expenditures15,71030,03058,000

(GST Included)

(Surplus)/Deficit(5,056)00

--------

Operating Budget of the Gerrard India Bazaar BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus55,07340,00040,000

Expenditures:

Administration2,742300300

Capital02,00016,250

Maintenance1,5003,0003,500

Promotion and Advertising22,09734,70019,950

Contingency/Provision19,909 0 0

Total Expenditures46,24840,00040,000

(GST Included)

(Surplus)/Deficit ( 8,825)00

--------

Operating Budget of the Harbord Street BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus18,55622,50026,000

Expenditures:

Administration4,6824003,000

Capital06,50015,000

Maintenance06003,000

Promotion and Advertising13,12913,0005,000

Contingency/Provision 809 0 0

Total Expenditures18,62022,50026,000

(GST Included)

(Surplus)/Deficit6400

Operating Budget of the Parkdale Village BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus46,81396,000115,500

Expenditures:

Administration9,76112,00025,000

Capital10,03260,00040,000

Maintenance13,57710,00020,000

Promotion and Advertising13,05813,000 20,000

Contingency/Provision 4,611 1,000 10,500

Total Expenditures51,03996,000115,500

(GST Included)

(Surplus)/Deficit4,22600

--------

Operating Budget of the Queen/Broadview Village BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus25,98726,00039,000

Expenditures:

Administration4,9441,0001,000

Capital010,00015,800

Maintenance6,34611,00017,200

Promotion and Advertising6,5644,0005,000

Contingency/Provision 1,609 0 0

Total Expenditures19,46326,00039,000

(GST Included)

(Surplus)/Deficit(6,524)00

Operating Budget of the St. Lawrence Neighbourhood BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and SurplusN/A50,00070,000

Expenditures:

AdministrationN/A 3009,120

CapitalN/A29,5012,500

Maintenance N/A10,00017,800

Promotion and AdvertisingN/A10,20030,500

ContingencyN/A 0 80

Total ExpendituresN/A50,00070,000

(GST Included)

(Surplus)/DeficitN/A00

--------

Operating Budget of the Upper Village BIA

For The Year 1998

Budget Summary

1997

1997Council1998

ProjectedApprovedBudget

Actual Request Request

$$$

Revenue and Surplus155,284135,000127,900

Expenditures:

Administration18,03425,90020,100

Capital15,00035,00053,000

Maintenance1,22118,10019,800

Promotion and Advertising 37,46456,00035,000

Contingency/Provision67,477 0 0

Total Expenditures39,196135,000127,900

(GST Included)

(Surplus)/Deficit(16,088)00

Appendix B

Business Improvement Area

Municipality

Stage in Budget Process

Bloor/Bathurst-Madison

T

A

Bloor-by-the-Park

T

A

Bloorcourt Village

T

A

Bloordale Village

T

B

Bloor West Village

T

A

Bloor-Yorkville

T

A

Corso Italia

T

A

Danforth-by-the-Valley

T

A

Dovercourt Village

T

C

Eglinton Way

T

A

Elm Street

T

C

Forest Hill Village

T

A

Gerrard India Bazaar

T

B

Greektown-on-the-Danforth

T

A

Harbord Street

T

B

Hillcrest Village

T

C

Junction Gardens

T

A

Keele-Eglinton

Y

C

Kennedy Road

S

A

Kingsway

E

A

Lakeshore Village

E

A

Little Italy

T

A

Long Branch

E

A

Mimico-by-the-Lake

E

C

Mimico Village

E

A

Mount Dennis

Y

C

Old Cabbagetown

T

A

Pape Village

EY

A

Parkdale Village

T

B

Queen/Broadview Village

T

B

Roncesvalles Village

T

A

St. Clair Gardens

T

C

St. Lawrence

T

B

Upper Village

T

B

Upper Village (York)

Y

C

Village of Islington

E

C

Weston

Y

A

Yonge/Queen-Dundas

T

C

Yonge-Eglinton

Y

C

A - Approved by Council - May 13, 1998

B - This Report

C - Budget not submitted

5

Terms of Reference - Harmonization of Services

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the following report (May 27, 1998) from the Chief Administrative Officer:

Purpose:

This report provides an update on the process that will be undertaken for the harmonization of services where departmental programs have been restructured as a result of amalgamation.

Funding Sources, Financial Implications and Impact Statement:

The recommendations in this report have no immediate financial impact.

Recommendations:

It is recommended that:

(1)the Chief Administrative Officer immediately direct the development of reports in each department that define service level variations across the City and identify to the appropriate Standing Committee services that must be addressed on a priority basis;

(2)the Chief Administrative Officer report to the Strategic Policies and Priorities Committee on the key principles that will guide service harmonization for 1999;

(3)based on the departmental service harmonization priorities determined in consultation with the Standing Committees, and using the principles approved by the Strategic Planning and Priorities Committee, the affected departments develop 1999 service harmonization plans for approval by Council through the appropriate Standing Committee to be implemented through the 1999 budget process; and

(4)the appropriate City Officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

Council on May 13, 1998, requested the Chief Administrative Officer to report to the next meeting of the Strategic Policies and Priorities Committee as to the process and timetable for the establishment of service levels and user fees.

This report discusses the process that will be undertaken for the harmonization of services where departmental programs have been restructured as a result of amalgamation.

Discussion:

Range of Public Services and Rationalization:

The new City offers a wide range of public services designed to both maintain and enhance the quality of life for its residents. It is actively involved in stimulating the business climate to further its economic development; maintaining and building infrastructure; providing police services; protecting the environment; providing a wide range of social services; and, managing the City's overall growth.

Prior to the amalgamation, all the current services were provided through the seven former municipalities. In many cases, the services provided by the former municipalities were similar and comparable, however, the programs, services, policies and local priorities were not necessarily consistent. As a successor municipality, the City has inherited the obligation to continue to provide the services its residents have become accustomed to, while trying to rationalize and harmonize them from the perspective of the unified City. Examples of services that need to be considered for rationalization include:

(a)parks and recreation services;

(b)garbage pickup and recycling:

(c)road cleaning and snow removal;

(d)library services; and

(e)issuance of permits and certificates.

Departmental Challenges:

During 1998, those departments whose programs and services have been restructured as a result of amalgamation, will begin to review and assess their respective programs for the harmonization of services and user fees. All the parameters associated with the programs and service delivery will be considered, i.e., City role, program outcomes, range of services, costs, funding sources, delivery mechanisms and geographic locations. It will not be possible to undertake a review of all affected programs in 1998 for the 1999 budget cycle. This exercise will be, by necessity, a multi-year undertaking and priorities will have to be established for the sequencing of programs to be reviewed.

The review for the harmonization of services will be undertaken in a structured manner with the participation of all key stakeholders, user groups and the public. In particular, departments will have to consider the following key factors/questions which will inform the Chief Administrative Officer's report on guiding principles to the Strategic Policies and Priorities Committee:

(a)compliance with legislated requirements and Council priorities;

(b)accessibility strategies;

(c)responsiveness to community needs;

(d)impact on other programs;

(e)detailed service cost analysis;

(f)analysis of demographic and geographic variables; and

(g)potential impact on low income groups.

In addressing the factors previously mentioned, the affected departments will also have to determine which programs and services are to be recommended for review as a priority during 1998 in consultation with their Standing Committees. Impacted departments may not have sufficient information readily available for the review of programs and services in relation to services so as to initiate public consultations with user and community groups. Departments require sufficient lead time as they strive towards the harmonization of specific services in a timely manner for 1999 budget process.

Political Process:

In order to ensure that all the relevant concerns are addressed in an effective manner, it is proposed that the departmental service harmonization plans be reviewed by the following committees:

(a)The Strategic Policies and Priorities Committee will approve the timetable, and the general guidelines and principles, that will guide service harmonization for 1999.

(b)The Standing Committees will review departmental reports on the harmonization of services and recommend to Council specific services to be addressed on a priority basis.

(c)The Community Councils will provide input and comment on policies as recommended by the respective Standing Committees.

(d)The recommendations of the Community Councils concerning the harmonization of services will be submitted to the respective Standing Committees and subsequently for Council's consideration.

(e)The Budget Committee will review the budgets related to service levels based on Council's decision as part of the 1999 budget process.

Owing to the time constraints, it is proposed that the affected departments report to their respective Standing Committee by October 31, 1998 on the plans for the prioritization and harmonization of key services.

The Chief Administrative Officer will report to the Strategic Policies and Priorities Committee on the principles that will guide service harmonization in 1999.

Conclusion:

As a result of amalgamation of the former municipalities into the new City of Toronto, services must be harmonized through a consistent and structured process, to meet the diverse needs of the City's communities. Departments are faced with many challenges as they seek to harmonize services, and should be provided with sufficient lead time so as to properly prepare and submit their plans (by October 31, 1998) to the appropriate standing committees for the harmonization of key programs and services for 1999.

Contact Name:

Firoz Kara, 392-8678.

6

Harmonization of User Fees for Recreation Programs

(City Council on June 3, 4 and 5, 1998, struck out and referred this Clause to the User Fee Committee, together with the following motions, with a request that the Committee meet as soon as possible to determine how to proceed:

Moved by Councillor Chow:

"It is further recommended that the findings and recommendations of the six Community Councils and the User Fee Committee be submitted to Council, through the Economic Development Committee and the Budget Committee."

Moved by Councillor McConnell, seconded by Councillor Korwin-Kuczynski:

"It is recommended that the report dated May 26, 1998, from the Chief Administrative Officer, be amended by:

(a)striking out Recommendation No. (1) and inserting in lieu thereof the following new Recommendation No. (1):

'(1)the pilot process for the harmonization of user fees for recreation programs in the Parks and Recreation Division outlined in this report be forwarded to the User Fee Committee, and that the User Fee Committee establish a process for public consultation at their first meeting;';

(b)deleting from Part (2) of the Terms of Reference, entitled 'Duration', the sentence 'The User Fee Committee will meet on a monthly basis between June and October 1998.', and inserting in lieu thereof the sentence 'The User Fee Committee will meet at least monthly.', so that Part (2) of the Terms of Reference shall now read as follows:

'(2)Duration:

The User Fee Committee will report to the Economic Development Committee and will present their findings and recommendations to the Economic Development Committee by October 1998. The User Fee Committee will meet at least monthly.'; and

(c)inserting in the first paragraph of Part (4) of the Terms of Reference, entitled 'Goals and Objectives', after the word 'options', the words 'and a thorough public consultation', so that such paragraph shall now read as follows:

'(4)Goals and Objectives:

The User Fee Committee will need to ensure that a comprehensive process is undertaken for the evaluation of policy options and a thorough public consultation for the harmonization of user fees for recreation programs provided in the former municipalities.' "

Council also adopted the following recommendation:

"It is recommended that the resignation of Councillor Giansante from the User Fee Committee be accepted, and the Striking Committee be advised accordingly.")

The Strategic Policies and Priorities Committee recommends the adoption of the following report (May 26, 1998) from the Chief Administrative Officer:

Purpose:

This report provides details of the process to be followed by the Parks and Recreation Department for the harmonization of user fees for its recreation programs. As a pilot project, this initiative will inform future processes for the harmonization of user fees.

Funding Sources, Financial Implications and Impact Statement:

The recommendations in this report have no immediate financial impact. The funding of programs will be impacted where user fees are harmonized and reset for specific recreation programs in 1999.

Recommendations:

It is recommended that:

(1)the pilot process for the harmonization of user fees for recreation programs in the Parks and Recreation Division outlined in this report be approved;

(2)the Terms of Reference for the User Fee Committee outlined in the Appendix be approved;

(3)the User Fee Committee report to the Strategic Policies and Priorities Committee in August 1998 on a generic consultation process based on the parks and recreation pilot project that may be used by the Standing Committees for the harmonization of user fees as a result of amalgamation;

(4)this report be forwarded to the User Fee Committee; and

(5)the appropriate City Officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

On May 13, 1998 Council received a report from the Striking Committee recommending the appointment of members to the User Fee Committee, and directing the User Fee Committee to await the outcome of reports requested of the Chief Administrative Officer by the Strategic Policies and Priorities Committee to report back on the Terms of Reference for a complete review of fees and service levels throughout the new City of Toronto. The Chief Administrative Officer was also requested to report to the next meeting of the Strategic Policies and Priorities Committee as to the process and timetable for the establishment of service levels and user fees.

This report discusses the pilot project for the harmonization of user fees for recreation programs that will be undertaken in consultation with the User Fee Committee. A separate report addressing the harmonization of other services is also being submitted to the Strategic Policies and Priorities Committee.

Pilot Project:

The issue of user fees for Parks and Recreation programs is perhaps one of the most visible examples of variances in policy among the former municipalities. The variances present a major challenge in developing a new approach to Parks and Recreation user fees that is equitable and appropriate for all areas of Toronto. This pilot project will provide valuable insight to inform future user fee harmonization projects.

The Parks and Recreation Division, acting on the advice of the Budget Committee, has developed a fast tracked strategy to bring a series of policy options forward for public consultation. The process proposed involves consultation with user groups, key stakeholders, and ultimately formal input and deputations at meetings of Community Councils and the User Fee Committee. The main features of the consultation plan are as follows:

(1)Development of Discussion Paper:

A comprehensive discussion paper has been developed by Parks and Recreation Division Staff which will form the basis for the public consultation process. The paper discusses the current scenarios in each of the former municipalities and provides the key elements of a strategy to develop a new comprehensive user fee policy. This discussion paper is being distributed the week of June 1, 1998, and will be available at all Community Centres, Recreation Facilities, Civic Centres and Libraries, will be posted on the City of Toronto Internet home page, and will be sent to key stakeholders and user groups. The discussion paper also provides opportunity for individuals to submit direct comments to the staff group which is co-ordinating the consultation process.

(2)Key Stakeholder Involvement:

A series of individual and focus group sessions will be held with a variety of key stakeholders in the first two weeks of June 1998. These sessions are intended to get input from groups with a specific interest in recreation programs. These include:

(a)Community Based Advisory Groups, in each of the former municipalities made up of key volunteers and allied professionals involved in the delivery of our services;

(b)Children's Action Committee, a specific consultation session with this committee will be held in June 1998;

(c)Toronto Community Social Planning Council will have a specific focus group consultation session in June 1998; and

(d)Allied Groups, such as the YMCA's, Boys and Girls Clubs, Metro Toronto Housing Authority, Toronto Police, Boards of Education and other allied service groups will have focus group consultation.

Once the dates for all these sessions are finalized, a list will be forwarded to Councillors.

(3)Open Public Consultation Sessions:

Four open consultation sessions are being planned for the last two weeks of June 1998. These sessions will be held at different geographical locations across the City and will be held in City owned recreation facilities. The sessions will be advertised in advance in local newspapers, recreation facilities and civic centres. The sessions will feature a short presentation to provide background and context, and the objective of these meetings will be to receive input from the public.

(4)Consultation Report to the Standing Committee:

A summary report will be prepared for the Economic Development Committee in September 1998 that provides a broad overview of the findings of the public consultation process, proposed policy changes, and the major options that should be presented for formal deputations to be held by the User Fee Committee in conjunction with the six Community Councils. In late September and early October, six formal deputation sessions are proposed for the User Fee Committee with the Community Councils.

(5)Economic Development Committee Review of Community Council/User Fee Committee Recommendations:

The findings and recommendations of the six community councils and the User Fee Committee concerning the harmonization of user fee policy for recreation programs will be submitted to the Economic Development Committee and subsequently for Council's consideration.

User Fee Committee Role:

The User Fee Committee will work in close consultation with the Parks and Recreation Division.

The primary focus of the User Fee Committee will be to provide guidance in the evaluation of policy options for the harmonization of user fees for recreation programs provided in the former municipalities. The User Fee Committee, working with a cross departmental team, will also provide guidance on the development of a generic process that may be used for other programs by the appropriate standing committee of Council, based on the parks and recreation model.

The User Fee Committee: (comprising of Councillors: Giansante, Korwin-Kuczynski, Li Preti, Mammoliti, McConnell, Moeser and Nunziata) will report to the Economic Development Committee. The Terms of Reference for the User Fee Committee are outlined in the Appendix.

Conclusion:

The pilot project for the review of Parks and Recreation User Fees is aggressive and fast-tracked. In order to address this issue with sufficient lead time and facilitate implementation of the revised user fee policy for the winter 1998/99 program cycle, the public consultation process must commence during the month of June 1998.

Contact Name:

John Macintyre, 397-4451.

Rosanna Scotti, 392-8637.

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Appendix

Terms of Reference

User Fee Committee-Review of User Fees Recreation Programs

(1)Mandate:

The mandate of the User Fee Committee is to provide guidance to the process for the harmonization of user fees for recreation programs and to propose a generic consultation process for the harmonization of other user fees.

(2)Duration:

The User Fee Committee will report to the Economic Development Committee and will present their findings and recommendations to the Economic Development Committee by October 1998. The User Fee Committee will meet on a monthly basis between June and October 1998.

(3)Process:

Initially the focus of the User Fee Committee will be to develop a generic process based on the parks and recreation strategy that has been launched. At various levels during the process as outlined in the report from the Chief Administrative Officer, stakeholder input is necessary to ensure a commitment to the recommended user fee policy options. The User Fee Committee will work in close consultation with the Community Councils, staff from the Parks and Recreation Division, community groups and Council members.

(4)Goals and Objectives:

The User Fee Committee will need to ensure that a comprehensive process is undertaken for the evaluation of policy options for the harmonization of user fees for recreation programs provided in the former municipalities.

In particular, the User Fee Committee will identify the necessary priorities from the City's perspective and ensure that the following factors are taken into consideration:

(a)accessibility by City residents;

(b)compliance with Council priorities;

(c)specific needs of individual communities, special demands, socio-economic factors;

(d)responsiveness to community needs;

(e)economies of scale;

(f)a balanced perspective of City priorities in relation to different service requirements; and

(g)whether user fees should be based on partial or full cost recovery or market value of services.

The User Fee Committee will also propose to the Strategic Policies and Priorities Committee a generic consultation process for the harmonization of user fees by August 1998.

(5)Staff Support:

The User Fee Committee will receive secretariat support from the Clerk's Division and policy support from Parks and Recreation, CAO, Transportation, Works and Community Services staff.

7

1998 Operating and Capital Budget

- Parks and Recreation Program

(City Council on June 3, 4 and 5, 1998, amended this Clause by adding thereto the following:

"It is further recommended that the Chief Administrative Officer be requested to submit a report to the Budget Committee on a policy governing the allocation of revenues from the disposition of City properties.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (May27, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council that:

(1) the following projects listed under the Parks and Recreation Program - Gross Budget Costs, be approved:

(a)$60,000.00 for the New Lit Sports Pad - Grandravine Community Centre - North York (Item No. 606);

(b)$50,000.00 for the Park Restoration and Naturalization - Vyner Greenbelt Phase 2 (Item No. 643);

(c)$100,000.00 for the Don Valley Brick Works (Item No. 45);

(d)$150,000.00 for the Phil White Arena - Lobby (Item No.906);

(e)$100,000.00 for the Colonel Sam Smith Extension (Item No.2);

(f)$100,000.00 for the Tennis Courts Convert - Amesbury (Item No. 619);

(g)$100,000.00 for the Clydesdale Park tennis project (Item No. 613); and

(2)such projects to be funded from the revenue from properties sold in 1998 ($1.56 million).

The Budget Committee reports having requested the Commissioner of Economic Development, Culture and Tourism to report back to the Budget Committee on funding the other supplementary capital items from any parks capital surplus.

Background:

The Budget Committee on May 26, 1998, had before it the following communications:

(a)(May 8, 1998) from the City Clerk regarding the 1998 Operating and Capital Budgets for the Parks and Recreation Program; and

(b)(May 25, 1998) from Councillor Joan King, Seneca Heights, regarding Clydesdale Park Tennis Project.

The following Councillors appeared before the Budget Committee in connection with the foregoing matter:

-Councillor Mario Giansante, Kingsway Humber;

-Councillor Maria Augimeri, Black Creek;

-Councillor Howard Moscoe, North York Spadina; and

-Councillor Douglas Holyday, Markland Centennial.

--------

(Report dated May 8, 1998, addressed to the

Budget Committee from the

City Clerk)

City Council, at its Special Meeting held on April 29 and 30, 1998, in adopting the 1998 Operating and Capital Budget, directed, inter alia, that the following items listed under the Parks and Recreation Program- Gross Budget Costs, be struck out and referred 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.

Council also directed 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."

--------

(Memorandum dated May 25, 1998, addressed to the

Budget Committee from

Councillor Joan King, Seneca Heights)

With regard to your Committee's agenda, for its meeting May 26, 1998, I would like to add an item to agenda item 3, sub-section (d) -1998 Operating and Capital Budgets.

The Clydesdale Park tennis project is an extremely important issue which was not included in the Parks and Recreation Program 1998 Capital Budget. I would very much appreciate that funding (approximately $100,000.00), be made available for this project. The community was under the impression that the Clydesdale Park tennis project was a priority issue for the 1998 Capital Budget. This project does have some health and safety ramifications, and I would appreciate your support for the work to be carried out.

Thank you.

8

Property Acquisition for Parkland - Canada Lands Company

- Scarborough Bluffs (Ward 13)

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (May27, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council:

(1)the adoption of the report (February 12, 1998) from the Commissioner of Corporate Services; and

(2)that the land acquisition be financed from Parkland Acquisition Reserve Funds.

The Budget Committee reports having requested that Commissioner of Corporate Services provide a report to the next Council meeting on June 3, 1998 as to whether the Canada Lands Company has carried out any soil testing on these lands, and if soil tests have been done, that such reports be provided.

Background:

The Budget Committee on May 26, 1998, had before it a letter of transmittal (May 11, 1998) from the City Clerk advising that on May 6, 1998, the Scarborough Community Council concurred with the recommendations of the Corporate Services Committee.

--------

(Letter of Transmittal dated May 11, 1998, addressed to the

Budget Committee from the

City Clerk)

Recommendations:

The Scarborough Community Council, on May 6, 1998, directed that the Budget Committee be advised that Scarborough Community Council concurs in the recommendation of the Corporate Services Committee that the following report be adopted:

(February 12, 1998) from the Commissioner of Corporate Services, recommending that:

(1)the City purchase the lands shown on the attached sketch being Part Lot 28, Concession B, City of Scarborough, at the price of $332,375.00, based upon an area of 1.076 hectares, with the final price to be adjusted upon completion of a survey plan, and the purchase to be conditional upon the soil conditions being found satisfactory;

(2)the City enter into a license agreement with Praxair Limited, permitting the existing pipeline crossing the property to remain for a period of ten years; and

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

Background:

The Scarborough Community Council had before it a communication (April 6, 1998) from the CityClerk, advising that the Budget Committee, on April 3, 1998, referred to the Scarborough Community Council, the letter of transmittal (March 30, 1998) from the Corporate Services Committee, wherein the Committee recommended the adoption of the foregoing report (February12,1998) from the Commissioner of Corporate Services.

--------

(Letter of Transmittal dated April 6, 1998, addressed to the

Scarborough Community Council

from Budget Committee)

Recommendation:

The Budget Committee on April 3, 1998 referred the letter of transmittal (March 30, 1998) from the Corporate Services Committee, regarding the acquisition of property for parkland adjacent to Natal Park, to the Scarborough Community Council.

Background:

The Budget Committee on April 3, 1998, had before it a letter of transmittal (March 30, 1998) from the Corporate Services Committee wherein the Committee on March 30, 1998, recommended to the Budget Committee the adoption of the report (February 12, 1998) from the Commissioner of Corporate Services.

--------

(Letter of Transmittal dated March 30, 1998 addressed to the

Budget Committee from the

Corporate Services Committee)

Recommendation:

The Corporate Services Committee on March 30, 1998, recommended to the Budget Committee the adoption of the report (February 12, 1998) from the Commissioner of Corporate Services.

Background:

The Corporate Services Committee on March 30, 1998, had before it a report (February 12, 1998) from the Commissioner of Corporate Services responding to a former City of Scarborough Council directive to purchase additional parkland adjacent to Natal Park; advising that this report summarizes the negotiations undertaken and the resulting agreement with Canada Lands Corporation; that the land acquisition is charged to Capital Account No. 67031-00000-00000-481 and funded from the Parks Reserved Fund No. 70490; and recommending that:

(1)the City purchase the lands shown on the attached sketch being Part Lot 28, Concession B, City of Scarborough, at the price of $332,375.00, based upon an area of 1.076 ha, with the final price to be adjusted upon completion of a survey plan, and the purchase to be conditional upon the soil conditions being found satisfactory;

(2)the City enter into a license agreement with Praxair Limited, permitting the existing pipeline crossing the property to remain for a period of ten years; and

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

--------

(Report dated February 12, 1998, addressed to the

Corporate Services Committee from the

Commissioner of Corporate Services)

Purpose:

In response to a former City of Scarborough Council directive to purchase additional parkland adjacent to Natal Park this report summarizes the negotiations undertaken and the resulting agreement with Canada Lands Corporation.

Funding:

The land acquisition to be charged to Capital Account #67031-00000-00000-481 and funded from the Parks (5 per cent) Reserved Fund #70490.

Recommendations:

It is recommended that:

(1)The City purchase the lands shown on the attached sketch being Part Lot 28, Concession B, City of Scarborough at the price of $332,375.00, based upon an area of 1.076 ha, with the final price to be adjusted upon completion of a survey plan, and the purchase to be conditional upon the soil conditions being found satisfactory;

(2)The City enter into a license agreement with Praxair Limited, permitting the existing pipeline crossing the property to remain for a period of ten years;

(3)That appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Background:

In 1991, City of Scarborough Council authorized negotiations with C.N. Rail to purchase approximately 1.21 ha (3 acres) of land on the south side of the C.N. line between Midland Avenue and Kennedy Road, immediately adjacent to Natal Park. The negotiations were stalled for a number of years as the land was being conveyed by C.N. Rail to the Canada Lands Company. The property is a 70m X 200m (1.076 ha, 2.659 acre) parcel which was part of a much larger holding expropriated by C.N. in the 1920's for track expansion and a rail yard. The plans for a yard were later abandoned and the surplus was transferred to the Canada Lands Company in the early 1990's. C.L.C. has since been marketing its surplus properties in the area. The subject is the last parcel in the immediate vicinity.

Natal Park is a 2.99 ha (7.4 acre) local park south of St. Clair Avenue, between Kennedy Road and Midland Avenue. The subject property was identified as an appropriate addition to Natal Park in 1991, during development of the park.

The Official Plan designation of the property is Neighbourhood Park. In anticipation of a conveyance to the City it was redesignated in 1997, as part of Official Plan and rezoning applications involving other lands owned by C.L.C. The current zoning is Single and Two Family Residential.

Comments:

The property is subject to a license agreement between C.L.C. and Praxair which permits two pipelines owned by Praxair Limited to cross the property. The pipelines, which carry hydrogen and nitrogen, extend approximately 4 kilometres from a glass manufacturing operation on Warden Avenue to the Praxair facility on Brimley Road. They are located close to the southern limit of the property, and then cross the property and proceed under the C.N. line. For most of their length the pipelines are located within various municipal road allowances. They have been permitted to remain there by an agreement with the municipality since their construction in the early 1960's. Praxair has agreed to add the subject property to the existing agreement.

A tentative agreement has been reached with Canada Lands Company with respect to the purchase of the property at a price of $332,375.00, which is equivalent to $308,882.00 per ha ($125,000.00 per acre).

Canada Lands Company is insisting that the City indemnify it with respect to the discovery of any contamination in the future. Under Ontario law, previous owners can be made to pay damages if found to have contaminated the property. C.L.C. indicates that the obtaining an indemnification from purchasers is an essential part of their mandate to dispose of surplus property formerly owned by C.N., and that they have been successful in receiving indemnifications from other purchasers. Had the property been used for rail purposes, staff would not recommend that such an indemnification be given. However, there is no indication that tracks were ever installed on any part of the property, nor that it has ever been used for any purpose other than agriculture. Nevertheless, to protect the City's interests, staff have insisted that the purchase is to be conditional upon the City satisfying itself as to the condition of the soils on the property, to ensure that no contamination is present. The estimated cost of the soil testing is $25,000.00.

Conclusion:

Purchase of this property will extend Natal Park to its logical boundary at the railway, and will provide needed parkland in an area which is deficient.. The purchase price is indicative of the market value of the property.

Contact Name:

R. Mayr, AACI, Director of Real Estate, Telephone No. (416) 396-4930, Fax No. (416) 396-4241, mayr@city.scarborough.on.ca, (cs98025.wpd)

(City Council on June 3, 4 and 5, 1998, had before it, during consideration of the foregoing Clause, the following report (May 29, 1998) from the Commissioner of Corporate Services:

Purpose:

To report to City Council concerning the availability of an environmental report on the subject property.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendation:

It is recommended that this report be received.

Council Reference/Background/History:

At its meeting of May 26, 1998, the Budget Committee requested that the Commissioner of Corporate Services provide a report to the next Council meeting on June 3, 1998 as to whether the Canada Lands Company has carried out any soil testing on these lands and if soil tests have been done, that such reports be provided to Council.

Comments and/or Discussion and/or Justification:

Canada Lands Company has not carried out any soil testing on these lands.

Conclusions:

Prior to completing the acquisition of this property, it will be necessary to undertake soil testing as set out in my report dated February 12, 1998.

Contact Name:

R. Mayr, AACI, Director of Real Estate, Telephone (416) 396-4930, Fax (416) 396-4241

mayr@city.scarborough.on.ca.)

9

Acquisition of Former Landfill Site Owned by the Ministry of

Transportation - Ward 16 - Scarborough Highland Creek

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (May27, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council:

(1)the adoption of the report (February 20, 1998) from the Commissioner of Corporate Services; and

(2)that the land acquisition be financed from Development Charges Reserve Funds.

Background:

The Budget Committee on May 26, 1998, had before it a letter of transmittal (May 11, 1998) from the City Clerk advising that on May 6, 1998, the Scarborough Community Council concurred with the recommendations of the Corporate Services Committee.

--------

(Transmittal letter dated May 11, 1998, addressed to the

Budget Committee from the

City Clerk)

Recommendations:

The Scarborough Community Council, on May 6, 1998, directed that the Budget Committee be advised that Scarborough Community Council concurs in the recommendation of the Corporate Services Committee that the following report be adopted:

(February 20, 1998) from the Commissioner of Corporate Services, recommending that:

(1)the City purchase the lands shown on the attached sketch being Part of Lot 12, Registrar's Compiled Plan 10303, at the price of $120,605.00, based upon a land area of 4.89 hectares (12.08 acres), with the final price to be adjusted upon completion of a survey plan; and

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

Background:

The Scarborough Community Council had before it a communication (April 6, 1998) from the CityClerk, advising that the Budget Committee, on April 3, 1998, referred to the Scarborough Community Council, the letter of transmittal (March 30, 1998) from the Corporate Services Committee, wherein the Committee recommended the adoption of the foregoing report (February20,1998) from the Commissioner of Corporate Services.

--------

(Transmittal letter dated April 6, 1998, addressed to the

Scarborough Community Council from the

City Clerk)

Recommendation:

The Budget Committee on April 3, 1998 referred the letter of transmittal (March 30, 1998) from the Corporate Services Committee, regarding the acquisition of the former landfill site owned by the Ministry of Transportation, to the Scarborough Community Council.

Background:

The Budget Committee on April 3, 1998, had before it a letter of transmittal (March 30, 1998) from the Corporate Services Committee wherein the Committee on March 30, 1998 recommended to the Budget Committee the adoption of the report (February 20, 1998) from the Commissioner of Corporate Services.

--------

(Transmittal letter dated March 30, 1998, addressed to the

Budget Committee from the

City Clerk)

Recommendation:

The Corporate Services Committee on March 30, 1998, recommended to the Budget Committee the adoption of the report (February 20, 1998) from the Commissioner of Corporate Services.

Background:

The Corporate Services Committee on March 30, 1998, had before it a report (February 20, 1998) from the Commissioner of Corporate Services advising that to continue with the Morningside Landfill remediation project, the City must acquire a 4.89 ha (12.21 acre) parcel owned by the Ministry of Transportation; that this report seeks authority to complete the purchase of that property; that the land acquisition is charged to Capital Account No. 59204-00000-00000-481 and funded from the General Development Reserve Fund, No. 71290; and recommending that:

(1)the City purchase the lands shown on the attached sketch, being part of Lot 12, Registrar's Compiled Plan 10303 at the price of $120,605.00, based upon a land area of 4.89 hectares (12.08 acres) with the final price to be adjusted upon completion of a survey plan; and

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

--------

(Report dated February 20, 1998, addressed to

the Corporate Services Committee from the

Commissioner of Corporate Services.)

Purpose:

To continue with the Morningside Landfill remediation project, the City must acquire a 4.89 ha (12.21 acre) parcel owned by the Ministry of Transportation. This report seeks authority to complete the purchase of that property.

Funding:

The land acquisition to be charged to Capital Account #59204-00000-00000-481 and funded from the General Development Reserve Fund, No. 71290.

Recommendations:

It is recommended that:

(1)the City purchase the lands shown on the attached sketch, being part of Lot 12, Registrar's Compiled Plan 10303 at the price of $120,605.00, based upon a land area of 4.89 hectares (12.08 acres) with the final price to be adjusted upon completion of a survey plan; and

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

Background:

Between the period 1960 to 1967, the then Township of Scarborough, in accordance with the standard practices of the day, utilized an existing gravel pit located at the south-east corner of highway 401 and Morningside Avenue as a sanitary landfill facility. Although a large part of the gravel pit was owned by the Township, both the University of Toronto and the then Department of Highways (now MTO) owned portions of it as well. Despite extensive research into the City's archives, no agreement permitting the City's landfill on the Province's property has been located.

The Ministry of Transportation owns 9.15 ha (22.6 acres) along the south limit of Highway 401 between Morningside Avenue and Conlins Road. Only 4.89 ha (12.08 acres) of this property were used as part of the landfill operation.

Extensive research into methods of containing the methane gas and leachate within the landfill site resulted in the former City of Scarborough approving an extensive remediation plan. This plan contemplated the construction of a barrier adjacent to the east, west and part of the south sides of the landfill to prevent the migration of gas and leachate from the site. Natural physical features prevent gas and leachate from migrating north or south.

The first phase of the plan, completed in 1996, included the construction of an underground barrier adjacent to Morningside Avenue north from Military Trail almost to Highway 401 to protect properties on the west side of Morningside.

The next phase includes construction of a barrier along the east and part of the south sides of the landfill area. The presence of landfill almost to the property limits required the acquisition of land or easements from the abutting owners to the east. Agreements with the University of Toronto and Torchin Developments, two of the three abutting owners, were approved by Scarborough Council in 1997. Acquisition of the 4.89 ha parcel from the Ministry of Transportation will permit the construction of the final phase of the barrier to proceed. All subsequent remediation efforts will occur within the landfill area itself.

Subject to approval by City Council, a tentative agreement has been reached with the Province for the acquisition of the 4.89 hectares (12.103 acres) adjacent to Highway 401, at a price of $120,605.00.

Comments:

Discussions with MTO to acquire the property have been ongoing since the fall of 1995. The property was appraised by an independent appraiser in 1996, and the Province has now agreed to sell at the appraised value of $120,605.00.

The zoning of the property is I - Institutional. The Official Plan designation is Waste Disposal Site, within an area indicated as District Park. Ministry of Environment regulations discourage the construction of buildings on any part of the site. The surface of the property may, however, serve as a storage area for the adjacent Works Yard.

The market value estimate of the site was predicated on the assumption that the portion of the property closest to Morningside Avenue would have limited utility in conjunction with the works yard, with the remainder of the property having only marginal value. The overall value of $24,710.00 per ha ($10,000.00 per acre) is only slightly above "conservation" land values.

Conclusion:

Acquiring this parcel will give the City complete control over the landfill area, and permit the next phase of the Morningside Landfill remediation project to proceed. Remediation will enable the rehabilitation and possible future sale of part of an adjacent city property which does not contain landfill.

Contact Name:

R. Mayr, AACI, Telephone: (416) 396-4930 Fax: (416) 396-4241 mayr@city.scarborough.on.ca (cs98020.wpd).

(Councillor Feldman, at the meeting of City Council on June 3, 4 and 5, 1998, declared his interest in the foregoing Clause, in that he owns a property in the immediate vicinity of the property in question.)

10

Income Sharing Arrangement with the

Toronto Parking Authority

(City Council on June 3, 4 and 5, 1998, adopted this Clause, without amendment.)

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations in the following transmittal letter (May 27, 1998) from the Budget Committee:

Recommendations:

The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council:

(1)the adoption of the joint report (May 14, 1998) from the Chief Financial Officer and Treasurer and President, Toronto Parking Authority subject to the income sharing arrangement being approved for one year; and

(2)that the income sharing arrangement between the City of Toronto and the Toronto Parking Authority be reviewed in one year's time.

Background:

The Budget Committee on May 26, 1998, had before it a joint report (May 14, 1998) from the Chief Financial Officer and Treasurer and the President of the Toronto Parking Authority.

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(Joint Report dated May 14, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer and

President, Toronto Parking Authority)

Purpose:

This report sets out a new income sharing arrangement between the City of Toronto and the Toronto Parking Authority (TPA) for net operating income generated in off-street and on-street operations.

Funding Sources, Financial Implications and Impact Statement:

Once the operation of on-street metered parking is assumed by the Toronto Parking Authority and following a 6-8 month period of equipment upgrades and rate adjustments, annual contributions are expected to be approximately $14-$15 million for combined off-street and on-street operations. This amount is projected to increase to $25 million per year over the next 3-4 years once the Authority's on-street meter program is fully implemented.

For 1998, an increase in revenue of $5.6 million is projected over the approved budget of $8.8 million if the rate adjustment, equipment upgrade and projected business activity materializes by year end.

Recommendations:

It is recommended that:

(1)The greater of $2,000,000.00 or 50 percent of net operating income earned from off-street parking facilities be paid over to the City of Toronto each year;

(2)The greater of $6,000,000.00 or 100 percent of net operating income from on-street meter operations be paid over to the City of Toronto each year;

(3)The new income sharing arrangement take effect as of January 1, 1998 for a three year period ending December 31, 2000;

(4)Net operating income be defined as gross parking revenue less direct operating expenses and less administrative expenses. Net operating income therefore excludes sundry revenue and expenses not directly attributed to carpark or meter operations;

(5)Payments be made on a monthly progress payment basis, based on the annual budget for the year;

(6)A final payment/settlement occur once the audited actual amount for the year is confirmed; and

(7)In the event that a need for funding arises from time to time and sufficient funding is not available from the reserves of the Toronto Parking Authority, Council will consider approving debenture funding provided that a viable business plan for the use of the funds is presented.

Background:

The City of Toronto has adopted a by-law establishing the Toronto Parking Authority which will be responsible for the operation of off-street parking facilities and on-street metered parking, as well as commercial boulevard parking in the former City of North York. Prior to amalgamation, each municipality had various arrangements/practices in place for the sharing and use of proceeds from their respective parking operations. The chart in Appendix 1 provides a brief summary of the practices respecting net parking proceeds for each former municipality.

With the amalgamation to the new City of Toronto and the transfer of responsibility for on-street metered parking to the new Toronto Parking Authority, there is a need to review and to formalize the income sharing arrangements between the new City and the new Authority.

This report examines the impact on the City's share of income by applying alternative income sharing options against the new Toronto Parking Authority's 1998 Operating Budget (which reflects the consolidated annualized expenditures and revenues for off-street and on-street meter operations) as a basis for comparison.

Discussion:

The consideration of a new income sharing arrangement with the Toronto Parking Authority should be based on the following criteria:

(a)represents rental payment for property leased from the City;

(b)should be based on net income generated, but also need to establish minimum payment to avoid significant fluctuations in revenue available to apply against the City's operating budget; and

(c)should not constrain the TPA's ability to self-fund its capital works program, meet normal working capital needs, or to take advantage of business opportunities, as they arise.

Appendix 2 contains five scenarios which are compared against the base case, ie. the 1998 Operating Budget for the new Toronto Parking Authority which contemplates assuming responsibility for all off-street facilities and on-street meter operations in the former municipalities.

In accordance with past practice, the base case retains an annual contribution amount of $4.7 million (to cover City Works allocated costs in the former City of Toronto) as a charge against the on-street metered parking revenue. In the future these funds would be derived from the City's share of net income from on-street meter operations received from the Toronto Parking Authority.

The table below summarizes the impact on income sharing from the alternative scenarios as indicated in Appendix 2.

--------

Table 1

Summary of Impact on Income Sharing from Alternative Scenarios

(Refer to Appendix 2)

Scenario

Description

$ Increase over

Base Case (1998 Budget)*

$000's

%

Increase

over

Base

Case

1

50% Net Income from Off-Street &

100% Net Income from On-Street

5,601.5

61.9

2

75% Net Income from Off-Street &

100% Net Income from On-Street

7,783.6

86.1

3

80% Net Income from Off-Street &

100% Net Income from On-Street

8,220.1

90.9

4

75% Net Income from Off-Street &

75% Net Income from On-Street

5,213.5

57.6

5

30% Gross Income from Off-Street &

30% Gross Income from On-Street

6,024.3

66.6

* Annualized consolidated estimates for new City.

The TPA's 1998 expenditure projection for off-street facilities was adjusted to include an estimated annual property tax increase of $437,500.00 (total increase of $3.5 million phased-in over 8 year period) per CVA. However, given the recent Provincial announcement (which may provide for a separate property tax class for parking facilities), this impact may be further reduced.

Scenario 1, which provides for the return of 50 percent of net income from off-street and 100 percent of net income from on-street meter operations, is recommended because on-street meter capital expenditures are not significant and can be met out of normal operating income (excepting $3.8 million approved in 1998 Capital Budget and $3.2 million projected in 1999 for new electronic parking equipment to convert mechanical meters and new installations). Over the next 3 years, the most significant increase in net income for the Authority will be in the on-street meter program and 100 percent of this net income will be returned to the City of Toronto. The payment of 50 percent of off-street net income has proved, in the past, to be an amount which allows the Authority to meet the more significant carpark investment capital and working capital requirements of off-street operations without incurring debt. For 1998, this scenario is projected to increase the approved budgeted revenue by $5.6 million.

Scenario 5 which is a return of 30 percent of Gross Income and while administratively easy to calculate, is not recommended as it does not take into account the fixed nature of many expenses and could expose the Authority to potential funding problems. Should gross parking revenues decline as they did during the 1992-1995 period, expenses cannot always be immediately reduced in response to dropping revenues.

Scenarios 2 and 3 are not recommended as these would adversely impact on the Authority's ability to self-finance projected investment capital and working capital requirements. Scenario 4 is not recommended as the Authority has planned to finance its capital expenditures over the 1998-2002 period from continuing to retain 50 percent of off-street net income.

Conclusion:

The recommendations are in keeping with prior arrangements between the former City of Toronto and the former Parking Authority of Toronto which former entities accounted for approximately 65 percent of on-street meter revenue and 93 percent of off-street carpark revenue, respectively.

The adoption of the recommendations ensures that the City receives all funds generated by the new Toronto Parking Authority which are not required to meet its immediate working capital needs and longer term investment capital requirements. In the event that sufficient funds are not available to satisfy a parking shortfall, then City Council will consider approving debenture funding for any such rare cases, provided a viable business plan for the use of the funds is presented at that time.

This report has been reviewed by the Commissioner of Works and Emergency Services and he concurs with its recommendations.

Contact Names:

Carmine Bruno, Budget Analyst, Finance Department, Telephone: (416) 397-4218.

Gerard Daigle, Director, Finance and Administration, TPA, Telephone: (416) 393-7295.

--------

Appendix 1

Summary of Disposition of Net Income from Parking Operations

(former municipalities)

Municipality / Agency Off-Street

Net Income

On-Street Metered

Net Income

Comments
Toronto - City Works Dept. $4.7 m contribution to taxation budget to off-set prorated costs Overnight Permits - net proceeds credited to reserve and used to fund Laneway Improvements Program.

Front Yard/Commercial Boulevard revenue applied against annual operating budget.

Parking Authority of Toronto (PAT) 50% Retained earnings

50% Rental payment to City, minimum $2.0m/yr

Parking Authority of North York 50% Retained earnings

50% Payment to City

50% Retained earnings

50% Payment to City

Etobicoke Parking reserve Parking reserve
York Parking reserve Parking reserve
Scarborough Parking reserve Parking reserve
East York Operating budget funding source

11

Toronto Transit Commission - Procurement of

Replacement Subway Cars

(City Council on June 3, 4 and 5, 1998, amended this Clause by deleting from the recommendation of the Budget Committee the words "Toronto Transit Commission's Capital Reserve Fund" and inserting in lieu thereof the words "TTC Capital Subsidy Reserve Fund", so that such recommendation shall now read as follows:

"The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations embodied in the communication (May 21, 1998) addressed to the City Clerk from the Toronto Transit Commission and the report (May 25, 1998) from the Chief Financial Officer and Treasurer, subject to financing the 1998 requirement from the TTCCapital Subsidy Reserve Fund.")

The Strategic Policies and Priorities Committee recommends the adoption of the recommendations embodied in the following transmittal letter (May 27, 1998) from the City Clerk:

Recommendations:

The Budget Committee on May 26, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, the adoption of the recommendations embodied in the communication (May21, 1998) addressed to the City Clerk from the Toronto Transit Commission and the report (May 25, 1998) from the Chief Financial Officer and Treasurer, subject to financing the 1998 requirement from the Toronto Transit Commission's Capital Project Reserve Fund.

The Budget Committee reports having requested the Toronto Transit Commission to report to the Budget Committee on the automated door system (platform edge doors) as originally proposed for the Sheppard Subway line and the cost factor involved.

Background:

The Budget Committee on May 26, 1998, had before it the following:

(i)communication (May 21, 1998) addressed to the City Clerk from the Toronto Transit Commission; and

(ii)report (May 25, 1998) from the Chief Financial Officer and Treasurer.

Mr. Gary Webster, Manager of Operations, Toronto Transit Commission, appeared before the Budget Committee in connection with the foregoing matter.

(Communication dated May 21, 1998, addressed to the

City Clerk from the

Toronto Transit Commission)

At its meeting on Wednesday, May 20, 1998, the Commission considered the attached report entitled, "Procurement Of Replacement Subway Cars."

The Commission also received deputations from Mr. S. Munro and Mr. P. Lambert concerning this matter.

After hearing the deputations, the Commission approved the Recommendation contained in the above report as listed below:

"It is recommended that the Commission approve recommendations (1) through (5) noting that:

(a)The H2 and H4 subway cars purchased between 1971 - 1975 are reaching the end of their useful life and must either be replaced, or rebuilt to extend their life to 45 years;

(b)Approximately $300 million is available in the 1998-2002 Capital Program for use to accelerate the replacement of H2 and H4 subway cars;

(c)An opportunity currently exists to replace H2 and H4 cars with T1's at a savings of approximately $500,000.00 per car over the current contract price, allowing Bombardier and its major component suppliers to continue uninterrupted production of T1's;

(d)Purchasing H2/H4 replacement cars now at the lower negotiated price will result in a savings of $99 million relative to the estimated final cost for replacement in 2002-2005 as reflected in the current 1998-2002 Capital Program. This analysis is based on net present value comparison including the interest costs associated with advancing the expenditures to purchase the cars now;

(e)The deferral of bus purchases, due to operational concerns with low floor buses as well as design and quality considerations, will make sufficient funds available in the 1998-2002 Capital Program. It will limit the impact of purchasing subway cars now to an accelerated cash flow and not require an expansion to the 1998-2002 Capital Program;

(f)Accelerating cash flow requirements in the Capital Program will assist in addressing the cash flow peaks immediately beyond the year 2000;

(g)If the Commission approves the purchase of replacement subway cars, the H4 cars can be used to meet the additional short term service requirements expected if the City of Toronto is successful with its bid for the 2008 Olympics;

(h)If the Commission does not approve the purchase of H2/H4 replacement cars now it will face two options: either replace the cars in 2002-2005 at a significantly higher price; or undertake a risky and expensive major rebuild program on 30 year old cars to extend their life to 45 years, noting that staff have no previous experience in rebuilding cars since most rebuild programs occur at the mid point of a vehicle's life. Therefore it is unknown how long the car's life will actually be extended.

(1)Amend the 1998-2002 Capital Program as follows, subject to City of Toronto Council approval:

(a)Advance the procurement of 156 replacement subway cars for the H2 and H4 fleets to coincide with completion of the current T1 subway car contract; and

(b)Defer the purchase of 391 buses in the 1998-2002 New Bus Acquisition Program, eliminate the H2 Life Extension Project and allocate these funds to the purchase of 156 T1 subway cars for delivery in 1999 through 2001.

(2)Subject to approval of recommendation (1):

(a)Amend the current contract with Bombardier Inc. to purchase 156 T1 subway cars in the amount of $307,948,204.00 to replace 76 H2 and 80 H4 cars; and

(b)Authorize funds in the amount of $3,060,000.00 for material, inspection, engineering and other in-house staff costs required for the purchase as summarized in Appendix2.

(3)Dispose of 76 H2 cars in the best interest of the Commission as they become surplus to the Commission's needs;

(4)Store the 80 surplus H4 cars for potential use should the City of Toronto be successful in its bid for the 2008 Olympics, noting that some work on the trucks, propulsion systems and control equipment would be required for the cars to be used in 2008; and

(5)Forward this report to the City of Toronto Council requesting approval of this budget amendment noting there is no net impact on 1998-2002 envelope requirements. Further, it is recommended that City Council authorize additional project approval in the amount of $300,296,251.00 gross and that financing in this amount be debentured if necessary for a term of up to 20 years."

The Commission also referred a brief submitted by Mr. Munro to staff for review and report back in due course on the possible implementation of the suggestions contained therein.

Due to timing limitations associated with the contractual options available to extend the current T1 Subway Car Contract, it is essential that a decision on this request is made by City Council at its meeting on Wednesday, June 3, 1998. To facilitate this decision, it would be appreciated if this matter could be included on the respective agendas for consideration by the City Budget Committee on Tuesday, May 26, 1998, the City Strategic and Policies Priorities Committee on Friday, May29,1998 and City Council at its meeting on Wednesday, June 3, 1998.

Your cooperation with respect to the foregoing is greatly appreciated.

--------

Toronto Transit Commission

Report No. 1

Meeting Date: May 20, 1998

Subject: Procurement Of Replacement Subway Cars

Recommendations:

It is recommended that the Commission approve recommendations (1) through (5) noting that:

(a)The H2 and H4 subway cars purchased between 1971 - 1975 are reaching the end of their useful life and must either be replaced, or rebuilt to extend their life to 45 years;

(b)Approximately $300 million is available in the 1998-2002 Capital Program for use to accelerate the replacement of H2 and H4 subway cars;

(c)An opportunity currently exists to replace H2 and H4 cars with T1's at a savings of approximately $500,000.00 per car over the current contract price, allowing Bombardier and its major component suppliers to continue uninterrupted production of T1's;

(d)Purchasing H2/H4 replacement cars now at the lower negotiated price will result in a savings of $99 million relative to the estimated final cost for replacement in 2002-2005 as reflected in the current 1998-2002 Capital Program. This analysis is based on net present value comparison including the interest costs associated with advancing the expenditures to purchase the cars now;

(e)The deferral of bus purchases, due to operational concerns with low floor buses as well as design and quality considerations, will make sufficient funds available in the 1998-2002 Capital Program. It will limit the impact of purchasing subway cars now to an accelerated cash flow and not require an expansion to the 1998-2002 Capital Program;

(f)Accelerating cash flow requirements in the Capital Program will assist in addressing the cash flow peaks immediately beyond the year 2000;

(g)If the Commission approves the purchase of replacement subway cars, the H4 cars can be used to meet the additional short term service requirements expected if the City of Toronto is successful with its bid for the 2008 Olympics;

(h)If the Commission does not approve the purchase of H2/H4 replacement cars now it will face two options: either replace the cars in 2002-2005 at a significantly higher price; or undertake a risky and expensive major rebuild program on 30 year old cars to extend their life to 45 years, noting that staff have no previous experience in rebuilding cars since most rebuild programs occur at the mid point of a vehicle's life. Therefore it is unknown how long the car's life will actually be extended.

(1)amend the 1998-2002 Capital Program as follows, subject to City of Toronto Council approval:

(a)advance the procurement of 156 replacement subway cars for the H2 and H4 fleets to coincide with completion of the current T1 subway car contract; and

(b)defer the purchase of 391 buses in the 1998-2002 New Bus Acquisition Program, eliminate the H2 Life Extension Project and allocate these funds to the purchase of 156 T1 subway cars for delivery in 1999 through 2001.

(2)subject to approval of recommendation (1):

(a)amend the current contract with Bombardier Inc. to purchase 156 T1 subway cars in the amount of $307,948,204.00 to replace 76 H2 and 80 H4 cars; and

(b)authorize funds in the amount of $3,060,000.00 for material, inspection, engineering and other in-house staff costs required for the purchase as summarized in Appendix2.

(3)dispose of 76 H2 cars in the best interest of the Commission as they become surplus to the Commission's needs;

(4)store the 80 surplus H4 cars for potential use should the City of Toronto be successful in its bid for the 2008 Olympics, noting that some work on the trucks, propulsion systems and control equipment would be required for the cars to be used in 2008; and

(5)forward this report to the City of Toronto Council requesting approval of this budget amendment noting there is no net impact on 1998-2002 envelope requirements. Further, it is recommended that City Council authorize additional project approval in the amount of $300,296,251.00 gross and that financing in this amount be debentured if necessary for a term of up to 20 years.

Funding:

The impact to the 1998-2002 Capital Program is limited to a change in the timing of expenditures. Sufficient funds totalling $300.3 million are available for the purchase of 156 replacement subway cars in the 1998-2002 Capital Program as indicated in the following table, based on deferring the purchase of 391 buses, eliminating the H2 minor life extension (2-3 years) and applying existing funds in the 1998-2002 Program for H2 and H4 replacement:

Table 1 - Funds Available in 1998-2002 Capital Program ($ millions)

Defer 391 Buses $181.2
H2/H4 Replacement $115.0
H2 Minor Life Extension $ 4.1
Total Funds Available $300.3

While more funds will be required in the years 1998/1999 than are currently budgeted, purchasing these cars now will permit the City of Toronto to save $99 million (net present value) relative to the estimated final cost for replacement in 2002-2005 as reflected in the 1998-2002 Capital Program. Further, utilization of a portion of the $828 million provided by the Province to discharge their responsibilities under the 5 year Provincial/Municipal/TTC Capital Subsidy Agreement would help to mitigate the 1998/1999 budget impact.

Under this proposal, the overall funding requirements for revenue vehicles over the next 10 years will be reduced by $240 million (Table2).

Table 2 - Net Cashflow Impact ($ millions)

Revenue Vehicle Replacement Plan Options

1998-2002

2003-2008

1998-2008

a) Current Vehicle Procurement Plan

$644

$1,388

$2,032

b) Defer Buses & H2/H4 Per Current Plan

$463

$1,571

$2,034

c) Proposed: Defer Buses & Advance H2/H4

$644

$1,148

$1792

Savings: Proposed Plan vs Current Plan (a - c)

-

($240)

($240)

The following table presents the current and proposed bus and subway car replacement plans.

Table 3 - Revenue Vehicle Replacement Plans (number of vehicles)

DESCRIPTION

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

1998 - 2002

Total

1998- 2008

Total

Current Bus

Plan:

104

179

100

131

131

237

138

159

98

120

145

645

1542

Proposed Bus Plan:

104

50

0

100

0

149

159

139

290

260

222

254

1473

Change 0 (129) (100) (31) (131)

(88)

11

(21)

192

140

77

(391)

(69)

Current Subway Car Plan:

78

52

0

0

0

6

78

78

78

60

0

130

430

Proposed Subway Car Plan:

78

70

76

62

0

0

0

6

78

60

0

286

430

Change

0 18 76 62 0

(6)

(78)

(72)

(0)

0

0

156

0

Background:

Revenue vehicles wear out in a predictable fashion. Subway cars are expected to have a 30 year life providing they receive proper maintenance and a mid life overhaul. Bus life at the TTC has historically been assumed to be 18 years. The current 1998-2002 Capital Program assumes replacement of rail cars at 30 years and buses at 18 years. In fact, given the different types of buses currently in our fleet assuming a single life expectancy is unrealistic.

Bus Program:

The TTC has in its fleet, monocoque buses consisting of GM New Looks and MCI classics and tubular frame buses built by two manufacturers; New Flyer and Orion using either "C" channel steel or closed boxed tube steel. Life expectancy of the GM and MCI buses with proper maintenance and overhaul can exceed 24 years. Life expectancy of the tubular framed buses ranges from 10 years to 18 years with proper maintenance and overhaul.

Recent experience with new bus procurements has been disappointing. At its meeting of January27,1998, the Commission received a report titled 1998-2002 Capital Program Amendment - Bus Purchases which outlined a proposed change in the Bus Acquisition Plan, plus an alternative use of the funds. This report noted that we would obtain 50 Orion VI low floor buses in early 1998 and 50 New Flyer low floor buses in mid-1999 and that it is essential to gain a minimum of one year of operating experience to fully assess quality issues and the impact of the use of low floor buses before purchasing additional buses. This is due to the expected lower passenger capacity and anticipated higher maintenance costs associated with this new technology. As a result, this report recommended the budget be revised to reflect reality by:(1)reducing the New Bus Acquisition Program by 391 buses; and

(2)re-assigning the estimated $181.2 million in capital funds for New Bus Acquisition to be held in a revenue vehicle replacement fund for use either to:

(a)advance H2/H4 subway car procurement to coincide with the end of the current T1 contract; or

(b)overhaul the current H2/H4 fleet to extend their life to 45 years (15 year increase).

Staff's recommendation to defer bus purchases will permit the necessary experience to be gained regarding the impact of low floor buses, however the deferred buses will still be required in the future beyond the 1998-2002 Capital Program. The system will survive by taking steps to ensure a 24-year life for all GM and MCI buses, thereby delaying their scrapping and the need for their replacements.

It is clear that the TTC will be unable to acquire new acceptable buses as planned in the approved 1998-2002 Capital Program which frees up funds for the acquisition of subway cars. However, this will result in extraordinarily high bus procurements in the 2003-2008 timeframe (see Table 3 previous page) with a resultant increase in cash flow requirements during those years.

Subway Car Program:

The Commission currently operates a total fleet of 622 subway cars with a 30-year design life. Continual replacement of vehicles, is therefore, necessary to maintain a reliable fleet to meet service requirements. The long leadtime required for the purchase of a new order of subway cars (approximately 30 months to the start of delivery), necessitates long term planning to ensure funds will be budgeted to permit the purchase of cars for delivery when required.

At its meeting of March 25, 1998, the Commission received a presentation from staff which summarized the status of the subway car fleet. The following table shows the size, age and replacement dates for the fleet prior to the receipt of T1 cars.

Table 4 - SUBWAY CAR REPLACEMENT PROGRAM

Class

No. of Cars

Year Built

Current Age of Cars

Age at Planned Replacement

Age at Proposed Replacement

M-1

36

1962-63

36

36

36

H-1

160

1965-66

33

33/34

33/34

H-2

76

1971

27

32/33

29

H-4

88

1974-75

24

30

26/27*

H-5

136

1976-79

22

30

30

H-6

126

1988-89

11

30

30

Total

622

* H2/H4 cars to be replaced in advance of their normal replacement age of 30 years. H4 cars to be stored in serviceable condition for occasional use as trippers pending a decision on the City of Toronto's bid for the 2008 Olympics.

The current T1 order of 216 cars will replace the M1 and H1 cars plus add 20 cars to the fleet for the Sheppard line. The T1 deliveries are as follows:

1995

1996

1997

1998

1999

216 Cars

6

18

62

78

52

The next subway cars due for replacement are the 76 H2 cars and the 88 H4 cars. The following two projects are included in the approved 1998-2002 Capital Program:

(1)An H2 Life Extension project ($4.1 million) for minor work to extend the life of H2 cars by 2 to 3 years to permit their replacement in a single, larger order with the H4 cars; and subsequently.

(2)An H2 and H4 replacement project for 164 cars between 2003 and 2005 at a total cost of $560 million based on an all inclusive price of approximately $3.3 to 3.4 million per car. This is budgeted as a new contract since any options to purchase additional cars through the existing T1 contract with Bombardier will expire soon.

The current T1 contract with Bombardier was approved in December, 1992 by the Commission and Metro Council and awarded at $493 million with provision for adjustment due to escalation. The contract included options which expire soon, to purchase additional cars to extend the T1 contract

Discussion:

Over the last two to three months, staff have reviewed the feasibility of and estimated a realistic cost for a major overhaul of the H2 and H4 fleets to extend their life to 45 years. In addition, staff have been negotiating with Bombardier for an extension to the existing T1 contract to replace the H2 and H4 cars at a significantly lower price. As a result, the Commission is faced with the following three options (as summarized in Table 5 below) regarding subway car requirements, although the third option of overhauling subway cars to extend their life to 45 years is very risky and not considered practical:

(1)Purchase T1 cars now at a significantly reduced price over current contract price; or

(2)Replace the H2 and H4 cars between 2002 - 2005 as currently shown in the 1998-2002 Capital Program; or

(3)Overhaul the H2 and H4 cars to achieve up to a 45 year life.

Table 5 - SUMMARY OF AVAILABLE OPTIONS

Options

Price/Car

(Millions)

Total Cost

(Millions)

Years of Service/

Total Cost Per Year

1) Purchase Cars Now

$1.97

$300

30 yrs/$10 million per yr
2) Purchase Cars in 2002/5

$3.3

$515

30 yrs/$17 million per yr
3) Overhaul H2/H4 (45 yr life)

$1.2-$1.4

$187-$218

15 yrs/$12-14 million per yr

In making a decision on which option to select, there are two comparisons required. First, a comparison of buying now versus buying later (Option 1 vs. Option 2) and then depending on the outcome of that analysis, a comparison of the preferred buy option versus a major overhaul of the H2/H4 fleets (Option 1 or 2 vs. Option 3).

Option 1 vs. Option 2: Purchase Cars Now or in 2002/2005:

Option 1 is the preferred and recommended option based on a comparison between the cost to purchase 156 T1 cars now at a significantly lower price per car including consideration of the interest costs associated with advancing the expenditure of funds (Option 1), versus the cost to purchase replacement cars in 2002-2005 at an estimated higher cost (Option 2).

The cost of 156 cars is $307 million (156 cars at $1.97 million, not including GST rebate), under Option 1 and $515 million (156 cars at $3.3 million) under Option 2. Based on a net present value comparison, the discounted costs for Option 1 and 2 are $270 million and $369 million respectively, which represents a net saving of $99 million for Option 1.

In addition, extending the T1 contract now to replace the H2 and H4 cars would provide a more uniform fleet with a larger number of T1 cars with the same configuration. This would reduce inventory requirements and provide more cars with improved operational, maintenance and passenger access/comfort features.

Also, if the H2 and H4 replacements are purchased now, the 80 H4 cars to be replaced will be stored pending a decision on the City of Toronto's bid for the 2008 Olympics. If the City is successful, these cars could be refurbished with minimal investment for use to handle the additional short term load on the transit system expected during the Olympic games. Prior to use in the Olympics, these cars would occasionally be used as "trippers" to ensure they remain operational. When no longer required, the vehicles will be sold in the normal fashion in the best interests of the Commission.

The estimated cost per car of $3.3 million for Option 2 is consistent with the numbers used in the 1998-2002 Capital Program, which was based on the current contract price for a T1 subway car ($2.5 million) adjusted for inflation based on delivery. The price also assumes a new contract with either the current or a new supplier with all the normal costs associated with a new order including engineering, development, proto-typing, tooling and production start-up costs. However, these costs would be amortized over a smaller 164 car order as compared to the existing T1 contract for 216 cars plus the proposed 156 car option (which has helped to reduce the price for extending the T1 contract now). In any event, in order for the two options to be equal, the purchase price of the new cars in 2003-2005 would need to be $2.5 million per car and this is not considered a reasonable or practical expectation.

Option 1 vs Option 3: Replace Cars Now or Overhaul H2/H4:

Option 1 is the preferred and recommended option based on a comparison of the average cost per year of service between purchasing 156 new cars with a 30 year life at $1.97 million/car, versus Option 3 involving a major overhaul of 30 year old cars at a cost of $1.2 to $1.4 million/car to extend their life to 45 years (a 15 years increase at 60 percent to 70 percent of the price of a new car) while enjoying none of the benefits of the new car technology in the areas of operational efficiency, maintenance and passenger access/comfort features.

A comparison reveals the much higher cost associated with overhauling 30 year old cars as the average cost per year of service for Option 1 (purchase new) is $10.2 million (156 cars at $1.97 million/car over a 30 years of life) versus Option 3 (overhaul) which is $14.6 million (156 cars at $1.2-1.4 million/car over a 15 year life). Since the expenditures will occur in approximately the same time period, interest cost differences are negligible.

Additionally, undertaking a rebuild program for cars at the end of their useful life to further extend their life to 45 years is considered very risky. Staff have no experience in rebuilding subway cars and while staff are rebuilding buses of a particular design with structures conducive to a rebuild, a subway car rebuild is a much more complicated and expensive venture. While staff are hopeful that a subway car rebuild will allow the cars to last 45 years, there is concern that this may be overly optimistic as it has never been done before.

Negotiations with Bombardier:

The negotiations with Bombardier Inc. to purchase 156 replacement subway cars are based on an option to extend the current T1 contract, however this opportunity is only available for a limited period of time. Thereafter, the options that Bombardier has with its major component suppliers based on the original T1 signed in 1992 contract will expire.

The negotiated agreement also includes contract security (performance bond or letter of credit) for 25 percent of the value of the contract extension, the costs for which would be shared equally by Bombardier and the Commission.

The significantly reduced price negotiated with Bombardier relative to the current contract price is a result of a unique, but temporary situation. First, Bombardier will complete the current T1 contract in late 1999 and there are currently no new orders to occupy their Thunder Bay facility and Bombardier may have to reduce its operation if this situation does not change. Second, under the original contract Bombardier had negotiated prices for components from its suppliers which are still in effect (but only for a limited time) and which are very attractive relative to current market prices. Third, based on the quantity of cars being considered, staff have negotiated a significant quantity discount based on adding 156 additional cars to the existing 216 car order based on economies of scale, and continuity of production, resulting in greater productivity and lower labour costs to assemble the cars at Thunder Bay. Fourth, staff have also negotiated special terms for this extension relating to payment/cashflow and contract security issues and improvements to provisions in warranty/reliability, delivery and liquidated damages included in the original T1 contract. Staff have taken advantage of a unique situation to establish a significantly reduced price with improved terms, however this situation is temporary and Bombardier can only offer it for a limited period of time.

Justification:

The H2 and H4 subway cars are reaching the end of their useful life and will need to be replaced in the near future. The purchase of 156 T1 cars now to replace H2/H4 cars represents the best option available to the Commission.

The purchase of H2/H4 replacement cars now at the negotiated lower price will result in significant saving in the amount of $99 million (net present value) compared to purchasing replacement cars in 2002-2005 as planned in the current 1998-2002 Capital Program.

The purchase of replacement cars now also represents a significantly lower average cost per year of service than overhauling 30 year old cars to extend their life to 45 years.

Funds are currently available in the 1998-2002 Capital Program for the purchase of 156 cars within the existing funding envelope based on advancing the expenditure of funds.

The purchase of 156 T1's to replace the H2/H4 subway cars will result in a more uniform fleet and offer operational, maintenance and passenger access/comfort features. The 80 H4's to be replaced can be stored for possible use to address additional service requirements expected during the 2008 Olympics pending a decision on the outcome of the City of Toronto's bid.

Appendix 1

Procurement Of Replacement Subway Cars

Summary Of Total Estimated Project Costs

VEHICLE COSTS
156 Replacement T1 Subway Cars $267,540,000.00
G.S.T. at 7% $18,727,800.00
O.R.S.T. at 8% $21,403,200.00
Cost of Contract Security (includes G.S.T. at 7%) $277,204.00
Total Payable to Bombardier $307,948,204.00
IN-HOUSE COSTS
Engineering/Administration/ Direct Labour $1,750,000.00
Fringe Benefits/Overheads $910,000.00
Communications Equipment/Materials $400,000.00
Total In-House Costs $3,060,000.00
Total Estimated Project Costs $311,008,204.00
Total G.S.T. Rebate $10,711,953.00
Total Estimated Project Costs

Less GST Rebate

$300,296,251.00

Note:The estimated cost for escalation and foreign exchange for the 156 car purchase is $8.1 million, however sufficient funds are expected to be available in the existing T1 Contract due to current under expenditures to cover this expense.

(Report dated May 25, 1998, addressed to the

Budget Committee from the

Chief Financial Officer and Treasurer)

Purpose:

To modify the 1998 Capital Works Program of the TTC to include the purchase of 156 subway cars to replace the existing H2 and H4 subway cars (project #422), and to seek authority for specific gross financing for the project.

Financial Implications:

The recommendations contained in this report would result in an increase in financing requirements in 1998 of $69 million. However, the total funding requirements for capital projects for 1998-2002 will not change significantly from the current projections as a result of the combination of the bus purchase deferrals and the advanced purchase of subway cars (although additional operating funds may be required to fund the expansion of the bus rebuild program implicit in the bus purchase deferral). Concurrently, as result of the lower price of subway cars resulting from the recommended extension of the current contract, the long term expenditure in subway car procurement will be reduced in a net present value amount of approximately $99 million from the current projections.

Recommendations:

It is recommended that:

(1)an increase to the 1998 gross capital budget of the TTC for project #422 - 156 subway cars (H2 & H4 Replacements) be approved in the amount of $69 million;

(2)new gross financing authority to project #422 - 156 subway cars (H2 & H4 Replacements) be approved in the amount of $300.3 million; and

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

Council Reference / Background:

At its meeting on April 29 and 30, 1998, Council adopted the 1998 Capital Budget for the Toronto Transit Commission which did not included the purchase of subway cars to replace the existing H2 and H4 cars. The related project was anticipated by the TTC to start in the year 2001, involving the purchase of 164 cars at a total estimated cost of $560 million.

At its meeting on May 20, 1998, the Commission adopted a report from the Chief General Manager of the TTC which recommended: (i) to advance the procurement of 156 replacement subway cars for the H2 and H4 fleets to coincide with completion of the current T1 subway car contract at a total cost of $300.3 million and (ii) to defer the purchase of 391 buses in the 1998-2002 bus acquisition program, eliminate the H2 life extension project and allocate these funds to the purchase of 156 T1 subway cars for delivery in 1999 through 2001.

Discussion:

The H2 and H4 subway cars were purchased between 1971 and 1975. Based on a service life of 30 years the cars are scheduled for replacement starting in 2001. Accordingly, the TTC capital expenditure projections associated to the approved 1998 capital budget included the H2/H4 replacement through years 2002 to 2005.

The TTC report indicates that an opportunity currently exists to replace the H2 and H4 cars with T1's at a savings of approximately $500 thousand per car over the current contract price allowing the current suppliers to continue uninterrupted production of T1's.

Based on the TTC estimates, the advanced purchase of cars will result in a total lower expenditure of $232 million in relation to the purchase of the same number of cars at the estimated price included in the current TTC capital projections, and the resulting net present value of the savings is approximately $100 million. The TTC calculations are based on reasonable assumptions and Finance concurs with the conclusions of the analysis.

The Commission at the same time approved the deferral of the bus procurement plan of the TTC as a result of: (i) an extension of the life of monocoque buses to 24 years (a 6-year extension) through the overhaul program currently being funded from the operating budget; and (ii) the need to gain a minimum of one year of operating experience to fully assess quality issues and the impact of the use of low floor buses before purchasing additional buses.

The combination of both measures (T1 advanced purchase and bus procurement deferral) will result in a smoothing of the capital expenditures of the TTC in the future years, in addition to the already noted savings related to the acquisition of the subway cars under the currently recommended alternative. However, the 1998 gross capital expenditures will increase by $69 million as a result of the H2/H4 subway car replacement project and a further $80 million will be required in 1999, as compared to the TTC 1998-2002 capital budget.

The revised projections include the assumption of the continuation of the bus rebuild program initiated in 1997. The 1998 operating budget included funds for the rebuild of 50 buses to extend their service life from 18 to 24 years. The deferral of the bus purchases is based on rebuild program comprising: 110 buses in 1998, 150 buses in 1999 and 2000, and 90 buses in 2001, which will increase the fleet in a manner that will provide for growth at 2 per cent per year.

The table below indicates the impact of the T1 advanced purchase and bus procurement deferral on the current projections of capital expenditures.

Vehicle Procurement ($ Million)

19981999200020012002Total

Original Projections

#422 - 164 Subway Cars

(H2/H4 Replacement)0.00.00.184.030.9115.0*

H2 Life Extension (included in Project

#460 Subway Car Overhaul)0.00.02.02.10.04.1

Bus Purchase Projects21.780.645.662.362.3272.5

Total Original Projections 21.780.647.7148.493.2391.6

*Post-2002 expenditures of $445.0 million and total project cost of $560.0 million.

Revised Projections

#422 - 156 Subway Cars

(H2/H4 Replacement)69.0138.352.240.80.0300.3

H2 Life Extension (included in Project

#460 Subway Car Overhaul)0.00.00.00.00.00.0

Bus Purchase Projects21.222.70.047.60.091.5

Total Revised Projections90.2161.052.288.40.0391.8

19981999200020012002Total

Difference (Revised - Original)

#422 - H2/H4 Replacement69.0138.352.1(43.2)(30.9)185.3*

H2 Life Extension (included in Project

#460 Subway Car Overhaul)0.00.0(2.0)(2.1)0.0(4.1)

Bus Purchase Projects(0.5)(57.9)(45.6)(14.7)(62.3)(181.0)

Total68.580.44.5(60.0)(93.2)0.2

*If post-2002 expenditures are included and the original project is adjusted to reflect the revised number of subway cars (156 instead of the original 164), the difference is as follows:

Original Project (adjusted) = $532.7 million

Less Revised Project = $300.3 million

Difference = $232.4 million

Conclusions:

The advanced purchase of cars recommended by the TTC, based on savings of approximately $500 thousand per car over the current contract price, will result in a total lower expenditure of $232 million in relation to the purchase of the same number of cars at the estimated price included in the current TTC capital projections, and a resulting net present value of the savings of approximately $100 million. Concurrently, the bus purchase deferral already adopted by the TTC will reduce the increase in capital financing resulting from the advanced expenditure. It is therefore recommended that the purchase of 156 subway cars to replace the existing H2 and H4 subway cars be approved

Contact Names:

Rob Hatton, 392-9149

Andres Hachard, 392-5377.

(A copy of Staff Summary Sheet appended to the report dated May 21, 1998, from Mr. Vincent Rodo, General Secretary, Toronto Transit Commission, has been forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on May29, 1998, and a copy thereof is also on file in the office of the City Clerk.)

(City Council on June 3, 4 and 5, 1998, had before it, during consideration of the foregoing Clause, a communication (June 1, 1998) from the Chief Financial Officer and Treasurer, requesting that the name of the reserve fund referred to in Clause No. 11 of Report No. 9 of The Strategic Policies and Priorities Committee regarding the procurement of replacement subway cars be modified from "Toronto Transit Commission's Capital Project Reserve Fund" to "TTC Capital Subsidy Reserve Fund.")

12

Other Items Considered by the Committee

(City Council on June 3, 4 and 5, 1998, received this Clause, for information.)

(a)Canada Day And The Celebrate Toronto Street Festival

The Strategic Policies and Priorities Committee reports having received the following report (May 13, 1998) from the Interim Lead, Toronto Special Events Office:

(May 13, 1998) from the Interim Lead, Toronto Special Events Office, reporting, as requested by Council at its meeting held on March 4, 5 and 6, 1998, that to date, confirmation has been received that all of Toronto's Roman Catholic and Lutheran churches and a number of Greek Orthodox and Baptist churches will participate in the Canada Day celebrations by ringing their church bells on July 1 at noon, and that confirmation with respect to participation by the Anglican and United churches is expected shortly.

(b)Payment of Costs for By-Election for Ward One, East York

The Strategic Policies and Priorities Committee reports having referred the communication (May 5, 1998) from The Honourable Al Leach, Minister of Municipal Affairs and Housing to the City Clerk for a report back to the next meeting of the Committee:

(May 5, 1998) from The Honourable Al Leach, Minister of Municipal Affairs and Housing requesting City Council to confirm whether or not the City is willing to pay for the by-election for a third member for Ward One, East York.

(c)Toronto Licensing Commission Incremental Legal Costs From Restructuring

The Strategic Policies and Priorities Committee reports having received the following transmittal letter (May 27, 1998) from the Budget Committee:

(May 27, 1998) from the Budget Committee advising that it received the motion moved by Councillor Moscoe requesting that $200,000.00 be added to the 1998 Operating Budget for the Toronto Licensing Commission, and the report (May 25, 1998) from the Chief Financial Officer and Treasurer.

Respectfully submitted,

MEL LASTMAN,

Chair

Toronto, May 29, 1998

(Report No. 9 of The Strategic Policies and Priorities Committee, including additions thereto, was adopted, as amended, by City Council on June 3, 4 and 5, 1998.)

 

   
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