HomeMy WebLinkAboutOPD-005-02
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REPORT
OPERATIONS DEPARTMENT
Meeting:
GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date:
March 25, 2002
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Report #: OPD-005-Q2
File #: J-/ I
By-Law #:
Subject:
Who Does What Review Stage II Review
Recommendations:
1. THAT Report OPD-005-02 be received for information;
2. THAT the 'Who Does What" Stage Two Report be endorsed subject to the
comments contained herein;
3. THAT the "Public Works Department Officials" continue to be the forum for
the implementation strategy phase and ongoing review of operational
efficiencies;
4. THAT the "Public Works Department Officials" identify a critical path to
implement efficiencies at the Regional and Municipal level and;
5. THAT Council authorizes staff to enter into negotiations with the Region for
use of the Region of Durham Orono Work Depot and report back to Council;
and
6. THAT a copy of the Report OPD-005-02 along with Council's direction be
forwarded to the Region of Durham FORTHWITH
Submitted by:
N cy Tay r, ,B. ., CA
D;~:'L
A,S. Canne a
Direelor of Engineering
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REPORT NO.: OPD-005-02
PAGE 2
BACKGROUND
On January 16, 2002, the Joint Works and Finance and Administration
Committee of the Region of Durham approved Report 2002-J-5 entitled Public
Works Officials 'Who Does What" Committee-Stage II Review. One ofthe
recommendations included in this report is as follows:
"THAT this report be forwarded to all local Area Municipalities for review and
comment, with all comments to be received by March 29, 2002."
A copy of the report is attached. (Attachment One)
Clarington staff has participated in extensive meetings throughout 2001 with
staff of other local municipalities, as well as staff from the Region of Durham.
Clarington staff participating included the Director of Operations, Director of
Engineering, Director of Finance, Accounting Manager and the former Director of
Public Works.
The purpose of the Public Works WOW Committee is to determine how to
improve upon and carry out changes to service delivery in order to provide better,
more efficient and effective service and at less cost to the taxpayer. The Stage II
review focused on eleven (11) specific areas as identified in Stage I.
The areas of business case development were limited to those approved in
Stage I including the proposed option. The business cases were intended to
establish whether to proceed to implementation or indicate that it is not
recommended to proceed. Deloitte and Touche were awarded the contract to carry
out five (5) of the business cases with participation of area municipal staff. The
balance of the business cases were carried out by the committee, with the
assistance of Ainslie Wood of Wood-Sloan Inc.
As noted in the Regional report, the City of Oshawa elected not to participate
in the Stage II review.
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The business cases prepared by Deloitte and Touche include Roads Network
Rationalization, Regional Roads Maintenance, Depot Rationalization, Solid Waste
Collection and Engineering Development Approvals.
Business cases prepared by the committee include Weed Control Act
Enforcement, Road-Related Permits, Vehicle/Equipment purchasing,
Standardization of Charge backs, Forum for Ongoing Review and Lead on
Infrastructure Projects.
Comments on each of the business cases will follow.
ROADS NETWORK RATIONALIZATION
In summary, over the past two years, the Who Does What Committee
reviewed the existing Regional and Area Municipal road network. A series of
Regional roads, whose current and anticipated future use is such that Area
Municipal rather than Regional ownership would be most appropriate, formed the
basis of the business case. Transfers from the Region to Area Municipalities are
being done to transfer roads, which are no longer regional in their use, to the
appropriate jurisdiction.
The objective of the Roads Network Rationalization Business Case, in
summary, is to align the accountability and control of road segments with the most
appropriate jurisdiction such that Area Municipality or Regional needs can best be
met.
The change in spending priority is referred to in the report as
"reprioritlzation". This means that jurisdictions receiving road segments from the
Region may change the magnitude or timing of capital expenditures in order to meet
local needs.
Figure 3.1 Proposed Road Assumptions (Attachment No,2), details the
proposed transfers between the Region and the Area Municipalities.
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REPORT NO.: OPD-005-02
PAGE 4
Two transfers affect the Municipality of Clarington:
Road From
Rossland Road Townline Road
(known as Pebblestone Road in Clarington)
To
Courtice Road
Transfer
Municipality of
Clarington to
Region
Main Street, Orono Taunton Road South Limit of Main Region to
Municipality of
Clarington
The Stage II Review Business Case supports the rationalization of the road
network and the above transfers. Region of Durham Report 2000-J-5 recommends
that a detailed Implementation Strategy Report be prepared.
In preparation for the Implementation Strategy, our Engineering Consultants
Totten Sims Hubicki, prepared a preliminary review to determine the existing
condition of the road, roadside environment, required improvements and estimated
improvement costs for Main Street. An evaluation was conducted by dividing Main
Street into five (5) Sections. The estimated costs for improvements are detailed in
as follows:
Section 1 - Hwy, 35/115 to Somerville Drive General Maintenance
Section 2 - Somerville Drive to Station Street $ 740,000
Section 3 - Station Street to Mill Street $ 120,000
Section 4 - Mill Street to Millson Hill Drive $ 800,000
Section 5 - Millson Hill Drive to Taunton Road General Maintenance
The total estimated cost for the preliminary capital improvement requirements
is $1,660,000. These costs must be weighed against the ownership of the road.
Over and above the impact of reprioritization, the additional financial impact
on the Region and the Area Municipalities results from a change in use or
"repurposing" of roads such as Rossland Road. The ultimate objective in the
transfer of Rossland Road (Pebblestone Road in Clarington) to the Region is to
change its use to a major regional arterial route.
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REPORT NO.: OPD-005-02
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REGIONAL ROADS MAINTENANCE
The objective of this business case is for the Region to retain ownership of
the road network and the daily maintenance would be outsourced to the area
Municipalities.
The Region would make payments to the area Municipalities for the
maintenance services provided.
In Clarington, there would be 320 lane kilometers of Regional Roads that the
Operations Department would maintain. Staff are receptive to the transfer of these
operational responsibilities since the existing level of service for summer roadside
maintenance provided by the Region is somewhat less than our municipal level of
service especially along sections of Highway Two and Waverley Road.
With regard to the winter maintenance function, the Municipality would
assume the Region's winter maintenance routes with the responding staff resources
being reallocated to the Municipality. Staff has questions as to the supervision and
inspection of the regional roads once they are under a maintenance agreement with
the Municipality and will require further dialogue with the Region in terms of road
inspections and levels of service.
With the transfer of road maintenance functions to the Municipality,
Clarington will also receive additional equipment and vehicles to correspond to the
additional maintenance activities. As Regional roads will have a higher level of
maintenance due to traffic volumes and to main connecting links an extra shift of up
to two mechanics may have to be included in the transfer of responsibilities if this
business case is implemented.
In view of the above it is suggested that a Route Optimization Study be
implemented to review and determine effective maintenance routes regardless of
any jurisdictional boundaries and at the same time review existing Depot locations
and make appropriate recommendations.
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REPORT NO.: OPD-005-02
PAGE 6
The Region has identified in the business case, capital funds for new vehicles
to address the expanded Waterworks function as well as the transfer of their existing
fleet to the various area municipalities. We have not been provided any specific
details on vehicle/equipment transfers and have concerns on maintenance and life
cycle issues. Staff will have to investigate the condition of all vehicles that may be
included in any type of transfer before entering into any agreement.
The assumption at the political level that the Committee did not consider the
road maintenance business case is false. Staff can tell you that generally all
Municipalities felt that the maintenance of Regional roads can create efficiencies in
the overall process. The problem that developed. at one of the last committee
meetings, was the Region increasing the Waterworks' portfolio due to loss synergy.
This is a position that the Consultants had difficulty in defending and one that
Clarington and most other area municipalities do not support. The results of the
Business Case was not to proceed to implementation. The effect of the increase as
necessary for the Waterworks Operations due to the lost synergies with the transfer
of the Worksfunctions, offset any savings to be found in this area.
DEPOT RATIONALIZATION
The objective of this Business Case was to de-commission duplicate Works
Depots across the Region.
One of the depots recommended for de-commissioning is the Orono
Operations Depot on Taunton Road. Staff has investigated the Regional Operation
Depot at 3585 Taunton Road, Orono and certainly agree that this would service the
current needs of the Clarington Operations Department. During the discussions at
the WDW Committee, the Region did indicate the possibility of relocating the
Waterworks function from this Depot, which would mean Clarington could utilize all
of the space.
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REPORT NO.: OPD-005-02
PAGE 7
As outlined in the business case, there would be a rental fee charged to the
Municipality for the use of the Depot. This is estimated to be between $20,000.00 to
$25,000.00 per year plus utilities and general building maintenance.
Staff is not recommending the disposition of the Orono Works Depot at this
time. The Department can utilize this yard for vehicle and equipment storage, a
Parks work area and miscellaneous municipal storage. The annual cost to maintain
this building is quite minimal and the building is in fair to good condition. Staff would
continue to evaluate in terms of improvements versus the normal life expectancy
and recommend appropriate action.
If Council accepts this recommendation and the Region is co-operative in
finalizing an agreement, the Municipality can dismantle and store the current sand
dome at the Orono Municipal Depot saving $45,000.00 from our Capital Program.
In this Business Case the Region identifies a third dome to be built with no
supporting documentation. Staff will continue to explore with the Region, expansion
potential of the domes to realize effective storage and distribution process that would
assist in the overall efficiencies of the winter operations in Clarington.
Clarington needs to resolve the possibility of the Region's Works Depot within
the next three to six months. If we fail to arrive at an acceptable arrangement,
Clarington will have to make the appropriate structural and reshingling repairs, which
would cost between $60,000.00 to $80,000.00 pending the timing of the tender call.
It is recommended that Council authorize staff to enter into negotiations with the
Region for the use of the Orono Region Works Depot and to report back to Council.
SOLID WASTE COLLECTION
This business case investigated the impacts and benefits of consolidating all waste
management services at the Regional level.
Currently only two municipalities operate their residential waste collection within their
existing Operations while the remaining six have independent contractors. Due to
the various differences of waste collection contracts across the Region, the earliest
implementation date for a one-tier management structure would be 2009,
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REPORT NO.: OPD-005-02
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The proposed 15% cost savings that was identified in the business case is
based on the theoretical assumption that the savings can be achieved through the
economies of scale. The 15% savings is based on so many assumptions and needs
further study to identify the areas where expenditures can be reduced.
Clarington has participated with the Region of Durham on the most recent
Request for Proposal for Integrated Waste Collection that includes the three
northern municipalities. Discussions regarding efficiencies, enhancements and a
possible agreement have been ongoing since December 2001 and a separate report
will be forthcoming dealing with this initiative.
Clarington is in general support of a one-tier waste management
structure that will enhance the waste management program across the Region and
improve our waste diversion initiatives.
ENGINEERING DEVELOPMENT APPROVALS
The objective of the Engineering Development Approvals Business Case is to
review the engineering component of the development approvals process and
investigate the concept of the Area Municipalities taking the lead for processing
engineering development applications,
Each Area Municipality and the Region was interviewed to determine the
current or "as-is" process. It was concluded that both the Area Municipalities and
the Region must carry out a complete and thorough review. The development
community feels that the review of engineering development approvals is not
customer service oriented. Engineering consultants must travel to multiple locations
and must contact multiple stakeholders in the review process. The consultant
receives comments from the Region and the Area Municipality at different times.
In addition, both the Region and the Area Municipalities have subdivision
agreements and unique forms associated with the development approval process.
In order to address the issues of multiple locations and points of contact, it
was recommended that a one-point of contact (one-window approach) be
implemented with the Area Municipality as the lead. This would be accomplished by
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REPORT NO.: OPD-005-02
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establishing a project coordinator. It is suggested in the Stage II Services Report
that, "this would not be a new position, but rather a change in responsibilities and
emphasis". Further recommendations include enhanced communication between
parties and an improved process to communicate changes in design criteria to the
development industry. As reported in correspondence to Deloitte & Touche from the
Director of Engineering, dated December 13, 2001, it is agreed that the
implementation of the project coordinator role will facilitate a number of issues
discussed in the business case. However, to be performed properly, it will evolve
into a full time position, contrary to the philosophy presented in the Stage II Services
Report, which states that the project coordinator role is a change in responsibility
and not the addition of a resource. It should be noted that this business case
recommendation is an enhancement of service and not a cost reduction issue.
WEED CONTROL ACT
Currently the enforcement of the Weed Control Act is a Regional
responsibility. During the Stage 1 Review, it was identified as one of the activities
that could be transferred from the Region to the Area Municipality with potential
benefits. In discussion with the Clerks Department and as indicated in the business
case, there is no significant benefit in transferring the Weed Control Act enforcement
to the area municipalities. The enforcement of the Weed Control Act will remain the
responsibility of the Region of Durham to coordinate and administer.
ROAD RELATED PERMITS
Public accessibility is the main benefit to a one-window approach regarding
permit processing. It was determined there would be no financial benefit. Improved
customer service could be achieved through customer service enhancements to
road-related permitting, as follows:
. The Region could provide Area Municipalities with basic information about its
road-related permits (Le. processing/contact information and a supply of
forms) in the event a local applicant needs a Regional permit, also.
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REPORT NO.: OPD-005-02
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. Similarly, Area Municipalities could provide the Region with basic information
about their road-related permits in the event an applicant needs a local permit
too.
. In the case of over-sized/over-weight load moving permits, the Ontario Good
Roads Association, in conjunction with MTO and the Ontario Truckers
Association (OTA) is currently exploring the interest and feasibility for a
computerized "one-window" province-wide system, that would provide the
necessary customer service/accessibility for truckers that the WDW
Committee sought to provide inter-municipally. This initiative should be
supported and encouraged, and each municipality should participate in the
OGRA survey.
. Forms could be standardized and printing requirements jointly tendered, thus
also enhancing economies of scale.
. Requirements could be standardized (I.e. for entrance permits, utility/other
consents, etc.), where possible.
. Fees could be reviewed with a view to standardization where
possible/feasible.
VEHICLE AND EQUIPMENT PURCHASING
This business case resulted in the support for the concept of cooperative
tendering for the purchase of vehicles and equipment across the Region. The
Durham Purchasing Cooperative has been very successful in obtaining better prices
due to the economies of scale. Some of the initiatives that have proven beneficial to
area municipalities include traffic signs, culverts, fuels etc.
The challenges with municipal fleet purchases across the Region and area
Municipalities include the timing of the annual budget approvals and the
standardization of specifications for vehicles and equipment. Clarington will continue
to be an active participant with the Durham Purchasing Cooperative on all initiatives
and will be willing to meet and develop standards and hopefully produce a further
regional opportunity where appropriate.
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REPORT NO.: OPD-005-02
PAGE 11
ROADS AND INFRASTRUCTURE PROJECTS
The WDW Committee during the Stage 1 Review recognized the current
practice of municipalities collaborating with one another on construction projects
involving two jurisdictions has been implemented and has existed for some time.
Specifically, it was determined that there is benefits to having one party
coordinate the entire project. Staff is in agreement with the following
recommendation as contained in this business case, in maintaining the status quo.
Our current practice has the proponent /initiator of an infrastructure project
involving more than one municipality, take the lead in the design, supervision of
construction and contract administration throughout the project, subject to the
agreement of the area municipalities.
STANDARDIZATION OF CHARGE BACKS
Several recommendations arose from meetings of the Area Treasurers. They
are as follows:
"THAT the municipalities within Durham Region (including the Region),
establish service agreements, including standardized administration fees and
labour burden costs, for road-related services in order to provide greater
accountability and the Works Officials are requested to detail the service
components within the engineering fee structure being performed on another
municipality's behalf in order that, with the assistance of the Treasurers, a fee
may be established for each engineering service."
There are significant differences in the charge backs that currently occur
between each area municipality and the Region of Durham, for such things as winter
control, spring clean-up, grass cutting, weed control, pavement marking, signage,
traffic control, etc. The rates vary due to local conditions, different service levels and
historical circumstances.
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REPORT NO.: OPD-005-02
PAGE 12
Engineering fees are charged on construction contracts. These also vary
significantly due to the variety of services and service levels included and the variety
of calculation methods.
Clarington staff concurs with the recommendations to address the differences
in charge backs through the implementation stage of the WDW Committee
proposals.
FINANCIAL IMPLICATIONS
Detailed financial implications are included in the complete WOW Stage II
Services Review Business Case Report dated January 2002 and are summarized
overall in the Region's report as attached. Particular implications for Clarington for
the four primary business cases will follow.
Road network rationalization for Clarington has an average one-time tax
increase of 0.21 % averaged over 19 years. This results from the difference between
the estimated capital costs Clarington would incur to improve Main SI. at $1,660,000
less the annual savings in maintenance costs as Clarington's number of lane
Kilometers to maintain decreases by 0.8 KM. Keep in mind, however, that the
capital costs will not, in fact, be spread over a 19-year time frame. There can be a
large fluctuation in the tax levy requirements in the capital budget in the years that
the work occurs.
Clarington would experience a slight decrease on the local levy of 0.55% if
the roads maintenance business case were to proceed. This is offset somewhat by
an increase on the Regional levy of 0.49% for a net effect of 0.08%. (Once again,
this is a 19-year average impact). The slight decrease for Clarington's local levy
results from an 8% administrative charge used in the model that the area
municipalities would charge the Region for performing the maintenance services on
their behalf. This rate could be addressed in order to make the case more feasible.
The difficulty with this business case revolves around the increase in the water rates.
It is estimated at $9.40 per household in Clarington because it was assumed that
water and sewer operations would need to hire staff and obtain equipment to replace
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REPORT NO.: OPD-005-02
PAGE 13
the effort currently provided by the regional road crews. Creative solutions could be
explored in this area.
With respect to Depot rationalization, the Deloitte & Touche business case
indicates that the local levy for Clarington would decrease by 0.03% averaged over
19 years. This results from avoiding the reshingling of the dome and an assumed
sale of the depot. It is Clarington's position that the depot would not be sold as
discussed earlier.
Discussions regarding costs for solid waste collection are better detailed in
Clarington's Report FND-06-02 on the March 25, 2002 General Purpose and
Administration Committee agenda. As mentioned above, staff does not support
some assumptions included in the Deloitte & Touche report.
CONCLUSION
Staff supports in principle the findings of the Stage Two Review Report as
developed through the Who Does What Review Process. Staff has identified
several key issues in each of the business cases that require further investigation
during the implementation stage.
The financial implications to the Road Rationalization and Road Maintenance
business cases will have to be reviewed in more detail to achieve efficiencies and to
justify the benefits to either the Region and or Area Municipalities.
Clarington is determined to improve upon any level of service that provides
better and more efficient and effective service to our taxpayer.
Recent examples include the successful partnerships with the Oshawa
Transit Commission, the City of Oshawa with the fire dispatch communication
system and the Region of Durham with the Integrated Waste program. Ongoing
discussions are underway with our Area Municipalities on other initiatives that have
been identified outside of the Who Does What Stage Review.
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Attachments:
Attachment #1
Attachment #2
WDW Stage II Review Report
Proposed Road Assumptions
CORPORATION OF THE MUNICIPALITY OF CLARINGTON
40 TEMPERANCE STREET, BOWMANVILLE, ONTARIO L 1 C 3A6 T (905) 263-2292 F (905) 263-4433
8'34 i'i'
Attachment #1 to Report #OPD-0015-02
THE REGIONAL MUNICIPALITY L.
JOINT
FINANCE & ADMINISTRATION AND WORKS COMMITTEE
AGENDA
WEDNESDAY, JANUARY 16, 2002
Immediately following the Tri Committee Meeting
Emergency Measures Boardroom
605 Rossland Road East
Regional Headquarters, Whitby
1. REPORTS Paae No.
a) 2002-J-3 Land Transaction Under Separate
Cover
1-2
b) 2002-J-4 Architectural Agreements for the Design, Tender Under Separate
and Contract Administration of New EMS Facilities Cover
3-8
c) 2002-J-5 Public Works Officials Who Does What' - Stage II Review Earlv Circulation
9 - 47
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835
Regional Municipality of Durham
To: The Works Committee
From: Commissioner of Works
Report: 2002.J- 5
Date: January 16,2002
SUBJECT:
Public Works Officials 'Who Does What' Committee - Stage II Review
RECOMMENDATIONS:
a) THAT this report be received for information; and
b) THAT this report be forwarded to all local Area Municipalities for review and
comment with all comments to be received by March 29, 2002; and
c) THAT upon receipt and review of comments from the Area Municipalities, Regional
staff reports back to Committees by May 29, 2002 with a summary of input received
and proposed next steps.
REPORT:
Attachment No.1 Public Works Officials Within Durham Region "Who Does What"
Services Review - Stage II Review - Executive Summary of Business
Case Reports - January 2002
In February 2001, Council authorized a Request for Proposals be issued for the detailed
Stage II Review of the earlier Public Works Officials Stage I Report findings. A contract
was awarded to Deloitte & Touche in association with Earth-Tech and IMOS, in April 2001.
An Interim Report, outlining the status of the Stage II Review, was submitted to Regional
Works Committee in September 2001.
Public Works Officials "Who Does What" Committee
The purpose of the Public Works WOW Committee is to determine how to improve upon
and carry out changes to service delivery in order to provide better, more efficient and
effective service and at less cost to the taxpayer.
The WOW Committee, Deloitte & Touche and Area Municipal and Regional staff resources
met frequently over several months to develop the Business Case Report. The City of
Oshawa did not participate in the Stage II review.
03
836
ReDort No.:
2002-.1.5
Paae No.: 2
Members of the Public Works WOW Committee are currently as follows:
d
,
. Jack McCorkell, Commissioner of Works, Region of Durham
. Brian Skinner, Director of Operations & Environmental Services, Town of Ajax
. Judy Avery, Director of Public Works, Township of Brock
. Fred Horvath, Director of Operations, Municipality of Clarington
. Richard Holborn, Div. Head, Municipal Property & Engineering, City of Pickering
. Larry Postill, Director of Public Works, Township of Scugog
. Ben Kester, Director of Public Works, Township of Uxbridge
. Wayne Hancock, Director of Public Works, Town of Whitby
Members also have designated Alternates to attend in their absence. In addition, the
Committee is pleased to have expertise and assistance from the Region's Finance
Department and Area Municipal Finance Departments, given the emphasis of the Stage
II Review on financial analysis.
'c
The following staff are Resources and/or Alternates to the Committee who attend WOW
Committee meetings:
I
,
1
Finances Resources and/or Alternates:
. Jim Clapp, Commissioner of Finance, Region of Durham
. Mary Simpson, Director of Financial Planning, Region of Durham
. Greg Kirkbride, Director of FinancefTreasurer, Town of Ajax
. Yvonne deWit, CAO, Township of Scugog
. Elaine Bellamy, Treasury Services Manager, Town of Ajax
. Michael Legge, Treasurer, Township of Brock
. Nancy Taylor, Director of Finance, Municipality of Clarington
. Lori Gordon, Manager of Accounting, Municipality of Clarington
. GiI Patterson, Director of Corporate Services & Treasurer, City of Pickering
. Kristine Senior, Manager of Accounting Services, City of Pickering
. Kathy McCann, Treasurer, Township of Scugog
. Ron Mitchell, Treasurer, Township of Uxbtidge
. Ken Nix, Treasurer, Town of Whitby
. Denise Pascoe, Manager of Treasury Services, Town of Whitby
Public Works Resources and/or Alternates:
. Tony Prevedel, Director of Transportation, Region of Durham
. Ken Thompson, Director of Environmental Services, Region of Durham
. Cliff Curtis, Manager of Development Approvals, Region of Durham
. Peter Watson, Manager of Waste Management, Region of Durham
. Ted Mortson, Operations Manager, Town of Ajax
. Sara Brown, Manager of Engineering Services, Town of Ajax
. Thom Gettinby, Deputy Clerk Administrator, Township of Brock
. Tony Cannella, Manager of Engineering, Municipality of Clarington
. Alex Grant, CAO, Township of Uxbridge
10
837
ReDort No.:
2002-J.5
Pa~e No.: 3
. Ted Rule, Manager of Operational Services, Town of Whitby
. Bill Watson, Manager of Development Services, Town of Whitby
Susan Siopis, Manager of Transportation Special Projects, acts as Committee Liaison &
Project Manager on behalf of Durham Region Works Department.
Ainslie Wood of Wood-Sloan Inc., who was retained by the WDW Committee for Stage I
of its Review, continues in her role as Committee Facilitator and acts as overall Project
Manager for the Stage II Review.
WOW Committee Members & Resources have met ten times through completion of this
Business Case Report. Agenda and Minutes are prepared for each meeting. In addition,
numerous one-on-one meetings have occurred with each Area Municipality and with the
Region, throughout this Review, to obtain/clarify information and to strategize on business
case methodology and approach.
The Business Cases
The Stage II Review Business Case Report contains two submissions, as follows:
1) Business Cases prepared by Deloitte & Touche containing the detailed financial
and qualitative analyses for Roads Network Rationalization, Regional Roads
Maintenance, Depots Rationalization, Solid Waste Collection and Engineering
Development Approvals.
2) Business Cases prepared by the WOW Committee containing analyses for
Weed Control Act Enforcement, Road-related Permits and Vehicle/Equipment
Purchasing, ancillary recommendations, and a report from the Area
Municipalities and Regional Treasurers' group on the issue of standardizing
chargebacks between and among municipalities for work carried out on the
other's behalf.
Regional Staff support and endorse the findings of the Business Cases developed by both
Deloitte & Touche and the WOW Committee.
The Stage II Review has two distinct components separating Business Case development
from Implementation Strategy development. This allows for the Business Case
recommendations to be considered prior to expending resources on Implementation
Strategies. The Stage II Review Business Case Report recommends the following:
1) Road Network Rationalization
'THAT the Business Case rationalizing the existing road network be received and a
detailed Implementation Strategy report be prepared.'
This business case studied the financial impact and validated the qualitative benefits of
realigning the ownership of the road network throughout the Region of Durham 833
11
ReDort No.:
2002-J-5
Paae No.: 4
in an effort to better reflect the nature of usage and interconnectivity throughout the Region
as a whole, as proposed in the Stage I Report. The proposal called for a total of 309.95
lane kilometres to be transferred from the Region to the Area Municipalities and 46.58 lane
kilometres to transfer from the Area Municipalities to the Region as detailed in the following
table:
Location: Lane Kilometres To Be Lane Kilometres To Be
Assumed By Local Area Assumed By Region-of-
Municioalitv- Durham
Town of Aiax 31.00 20.33
TownshiD of Brock 13.00 0.00
Municipality
of Clarinaton 5.20 6.00
City of Oshawa 176.50 2.80
City of Pickerina 28.85 0.85
Townshio of Scuaoa 23.20 0.00
Township
of Uxbridae 0.00 10.60
Town of Whitbv 32.20 6.00
Totals: 309.95 46.58
The Deloitte & Touche study recommends that Rationalization of the Road Network
proceed to the implementation strategy phase.
2) Regional Roads Maintenance
'THAT the Regional Roads Maintenance Business Case be received and the suggestions
for enhanced co-operative efforts as outlined in the Business Case report be pursued:
The Regional Roads Maintenance business case investigated the financial and qualitative
aspects of having the maintenance of regional roads performed by the local Area
Municipalities. The recommendation resulting from this study, based on the financial
analysis, does not support regional road maintenance being done at the local level but
instead recommends pursuing optimal operating efficiencies by continuing to review the
provision of various services without regard to municipal boundaries or jurisdictions.
3) Depot Rationalization
'THAT the Business Case rationalizing existing Depots be received and a detailed
Implementation Strategy report be prepared.'
12 839
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ReDort No.:
2002-.1-5
Paae No.: 5
The Depot Rationalization business case considered the financial impact and qualitative
benefits of rationalizing the existing twenty-two (22) depot locations across the Region by
reducing the number of depots to fifteen (15) in the short term. The following locations
have been identified as opportunities for action in the near future:
For Combining:
Ajax Operations Centre and Ajax/Pickering Regional Depot - Ajax Operations
Centre operations to be located at the Region's Ajax/Pickering Depot
Brock Townships's Sunderland Depot and the Region's Sunderland Depot - Brock's
Sunderland Depot operations to be located at the Region's Sunderland Depot
Scugog's Port Perry Depot and the Region's Scugog Depot - Scugog's Port Perry
Depot operations to be located at the Region's Scugog Depot
For Decommissioning:
Brock's Beaverton Depot
Brock's Cannington Depot
Clarington's Orono Depot
Scugog's Island Depot
Deloitte & Touche has recommended proceeding to the implementation strategy stage with
this business case and further recommends that the review continue to allow for the
identification of any future opportunities as they arise.
4) Solid Waste Collection
'THAT the Solid Waste Collection Business Case Report be received and preparation of
a detailed Implementation Strategy report be deferred until such time as further information
is available related to current waste collection initiatives:
This business case investigated the impacts and benefits of consolidating all waste
management services at the Regional level. The study examined current and enhanced
levels of service in diversion and source stream separation. The study determined that
there are savings to be recognized under a one-tier system both with current levels of
service and future enhanced levels of service. In fact the study indicates that a one-tier
system can provide an enhanced level of service at a lower cost than current levels of
service in the two-tier system are provided today. Deloitte & Touche recommends
proceeding to the implementation study strategy. However, the WDW committee agreed
to recommend deferral at this time in order to evaluate the results of waste collection
initiatives currently underway.
13
840
...
ReDort No.:
2002.J-5
PaGe No.: 6
5) Engineering Development Approvals
'THAT the Business Case assessing the concept of a 'one-window' approach to
coordinating approvals of the engineering component of development applications at the
Area Municipal level be received and a detailed Implementation Strategy report be
prepared.'
As per the recommendations of the Stage I report, the concept of the Area Municipalities
taking the lead in processing engineering development applications was investigated. The
study resulted in the recommendation to proceed with an implementation strategy being
developed for a 'one-window' approach with each jurisdiction providing a project
coordination role to allow for one-point-of-contact for the customer while maintaining their
current areas of responsibility and accountability.
6) Weed Control Act Enforcement
'THAT the Weed Control Act Enforcement Business Case be received and that no change
occur to the current service delivery model.'
This business case investigated the possible impacts and benefits of providing this service
at the local level as per the Stage I Report recommendations. The review resulted in the
WOW Committee's recommendation to continue this service delivery at the Regional level.
7) Road-Related Permits
'THAT the Business Case assessing the concept of a 'one-window' approach to Road-
related Permit Applications processing be received and that the WOW Committee facilitate
introduction of customer service enhancements as outlined in the Business Case.'
As per the recommendations of the Stage I report, the concept of a 'one-window' approach
for receiving and processing road related permit applications was investigated. The results
of this study do not support a one-window approach; however, the business case does
identify several areas where customer service enhancements would improve the permitting
process. The WOW committee supports the recommendation to further opportunities in
specific areas of permitting.
8) Vehicles & Equipment Purchasing
'THAT the Business Case assessing the feasibility of purchasing vehicles and equipment
on a co-operative tender basis be received and that the WOW Committee facilitate the
formation of a committee of public works staff to work in consultation with the Durham
Purchasing Cooperative to effect the suggestions outlined in the Business Case.'
This business case resulted in support for the concept of co-operative tendering for the
purchase ,..f vehicles and equipment. The WOW Committee supports the
14
841
Reoort No.:
2002-J.5
Paae No.: 7
recommendation to further this opportunity through development of standard specifications
for vehicles and equipment through a staff team working in co-operation with the Durham
Purchasing Co-operative.
9) Forum for On-going Review of Road Network Rationalization and Depot
Rationalization
'THAT the Public Works Officials' WOW Committee be the forum for on-going review and
rationalization of the road network and depot locations to provide a periodic evaluation
mechanism for these business programs.'
10) Lead on Infrastructure Projects Involving more than one Municipality
'THAT the proponenVinitiator of an infrastructure project involving more than one
municipality take the lead in the design, supervision of construction and contract
administration throughout the project; it being pointed out that the current practice of each
jurisdiction collaborating with one another would also continue.'
11) Standardization of Chargebacks
'THAT the municipalities within Durham Region (including the Region) establish service
agreements, including standardized administration fees and labour burden costs, for road.
related services in order to provide greater accountability; and the Works Officials be
requested to detail the service components within the engineering fee structure being
performed on another municipality's behalf in order that, with the assistance of the
Treasurers, a fee may be established for each engineering service.'
As requested by the Stage I review, the Treasurers have identified the inconsistencies in
the current roads related charges amongst the municipalities (including the Region) and
offer some recommendations. Analysis indicated that it would not be equitable to impose
standardized fees as the Area Municipalities have different service levels and different
labour costs / contractual obligations, However, it is recommended that service
agreements be established between the Region and each Area Municipality and between
the Area Municipalities if appropriate. Further, it is recommended that the administration
fee for the processing of invoices be standardized. It is also recommended that labour
burden costs be standardized to the extent possible and be set based on approval in the
service agreements.
The benefits of standardizing comparable services delivery processes are largely
qualitative in nature, The main benefits include identification of the services and explicit
service levels; harmonization of fees, including administration and staff costs;
accountability between municipalities; and definition of responsibilities.
15
. f542
.
ReDort No.:
2002.J-5
Palle No.: 8
Engineering fees were reviewed by the Treasurers who determined that there were wide
variations in the processes fDr charging back for service delivery on construction contracts.
Some municipality's charge a percentage (10% - 15%) of the total construction costs
whereas others charge based on proportionate share of actual invoices received for
contracted services. The components to be included within the engineering fee structure
also varied considerably along with how the service was performed (Le. in-house, outside
cDnsultant, or a combination of both).
NEXT STEPS
This report recommends that the Stage II report be forwarded to the local area
municipalities for review and comment by March 29, 2002. Upon receipt of any comments
a further report, making recommendations to Committees regarding future Implementation
Strategies; will be prepared for those Business Cases where approval to proceed to the
next reporting phase h.as been granted. The Implementation Strategy Report will then be
submitted for consideration and direction to proceed with implementation.
CONCLUSIONS:
As directed by Council in February 2001, the Who Does What Committee along with staff
resources from municipal Finance departments facilitated the completion and review of
each Business Case as identified in the Stage 1 report. Recommendations related to each
Business Case study are noted above. As noted in the recommendations, the results of
several Business Case studies warrant the advancement of Implementation Strategies.
The attached Executive Summaries provide rationale for each Business Case
recommendation. Two copies of The Stage II Review Business Case Report, in its
entirety, has been forwarded to each Area Municipality. Additional copies will be made
available upon request.
Deloitte & Touche staff will be in attendance to present the Stage II Report. As well,
Ainslie Wood, who has facilitated this second stage of the process and prepared several
Business Cases on behalf of the committee, will be in attendance.
. McCorkell, P. Eng
mmissioner of Works
~~,.
R.I. app, CA '
Commissioner of Finance
CAM1/cb
16
843
1.0 Executive Summary
This report contains the findings from the development of five business cases that relate to the
rationalization of Public Works operations within the Region of Durham and the Area
Municipalities. Deloitte & Touche was contracted by'the Region to prepare business cases and
implementation strategies based on the areas for review identified in the "Who Does What"
Services Review Stage 1 Report, dated May 2000. Deloitte & Touche's expertise was
complemented by the road maintenance and solid waste expertise of Integrated Maintenance
Operations Inc. and Earth Tech Canada Inc. to ensure that external comparative information was
considered. The purpose of the business cases is to assist with the assessment of how best to
improve upon, and carry out changes to service delivery in order to provide better, more efficient
and effective service and at less cost to the taxpayer. The five business cases covered in this
report are:
. Roads Network Rationalization
. Regional Roads Maintenance
. Depot Rationalization
. Solid Waste Collection
. Engineering Development Approvals
Implementation Strategies for approved business cases will be presented in a subsequent report.
The City of Oshawa is not an active participant in this, the second stage of the project. In order to
assess the full potential impact on the Regional tax levy and the associated impact on the tax
burden in each Area Municipality, proxy information was utilized for Oshawa based upon input
from a number of sources.
Summary of Results
Roads Network Rationalization (page 3 of executive summary)
Result: This business case demonstrates that the overall cost to the system for reprioritizing
(excluding Oshawa) is an average one-time tax increase of 0.01% averaged over 19 years for an
average residential household with current value assessment (CVA) of $200,000. This business
case demonstrates further that the end cost to the taxpayer, even after road repurposing, is an
additional tax increase of 0.26% per average household with CVA of $200,000.
Recommendation: We believe that the rationalizatiDn of the existing road network should proceed
according to the proposal put forth by the WDW Committee.
Regional Roads Maintenance (page 10 of executive summary)
Result: The overall result of this business case is a net increase of $10.90 on an average
residential home (CVA =$ 200K) that consumes 60,000 gallons of water per year. This arises
from an average water user increase of $7.14 in water and sewer rates, in addition to a net
general levy average tax increase of $3.76 in the general tax levies.
Recommendation: This concept should not be pursued in its current form.
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Depot Rationalization (page 14 of executive summary)
Result: This business case demonstrates that the overall benefit to the system is an average one-
time tax decrease of 0.03% averaged over 19 years for an average residential household with
current value assessment (CVA) of $200,000. This business, case has shown that, on an overall
basis, the taxpayer will benefit from the Depot Rationalization process.
Recommendation: It is recommended that the Depot Rationalization process be undertaken as
proposed.
Solid Waste Collection (page 17 of executive summary)
Result: The results of this business case demonstrate that overall, the Region can save costs by
moving to a one-tier structure. More importantly, the Region can also enhance its current source
streams and still operate at a lower cost under a one-tier structure than it could by maintaining its
current two-tier structure with current source streams.
Recommendation: We recommend that this business case be approved so that an
implementation strategy can be developed.
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Engineering Development Approvals (page 21 of executive summary)
Result: The review identified the required process changes to achieve a one-window approach
with each jurisdiction required to maintain responsibility and accountability for their respective
engineering decisions and associated financial control. Our review indicated that all process
changes would have a very minor, if any, cost impact, such that a detailed cost analysis was not
deemed necessary.
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Recommendation: We recommend that this business case be approved so that an
implementation strategy can be developed.
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1.1, Roads Network Rationalization Business Case
Refer to page 25 for the detailed report.
Background
The objective of this business case is to investigate the financial impact and validate the qualitative
benefits of realigning the ownership of the road network throughout Durham, to better reflect the
nature of usage and interconnectivity between, and among, the Region and Area Municipalities, as
proposed in the WDW Stage I Report. This proposal called for a total of 309.95 lane kilometers to
be transferred from the Region to the Area Municipalities, and 46.58 lane kilometers to be
transferred from Area Municipalities to the Region.
Approach
A methodology was developed for this business case that looked at the financial implications of
the proposed transfers in terms of:
. The capital costs that would now be the responsibility of the jurisdiction receiving the road
segment, relative to those avoided by the jurisdiction transferring the road; and
. The on-going maintenance costs that would now be the responsibility of the jurisdiction
receiving the road segment, relative to those avoided by the jurisdiction transferring the road.
Estimates of required capital expenditures were obtained from each jurisdiction, combined with
estimates of incremental maintenance costs. In developing the methodology, it became apparent
that several other factors had a significant impact on the results of the business case. These
included:
. Whether or not the City of Oshawa participated in the transfer - the Stage I report proposed
176.5 lane kilometers be transferred from the Region to the City of Oshawa and 2.8 lane
kilometers be transferred from the City of Oshawa to the Region;
. Whether jurisdictions receiving roads intended to change the timing or extent of capital
investment (without changing the type of work to be done compared to the current owners
Roads Needs estimates) due to them placing a different priority on the road compared to the
jurisdiction transferring the road - we define this as "reprioritizing".
. Whether jurisdictions receiving roads intended to make capital investments over and above
ordinary levels of maintenance in order to repurpose their use - we define this as repurposing,
with the best example being the potential future redevelopment, by the Region, of Rossland
Road into a major arterial Regional route.
. The extent of possible funding sources for the capital costs, either from development charges
or, from the transferring jurisdiction during a "funding window". The Stage I Report had
considered the possibility of a funding window until 2004, during which budgeted funds might
be transferred between jurisdictions.
In view of these factors, a base case was developed for this business case that looked at the total
tax impact of transferring and reprioritizing the roads. This was based on the assumption that
roads would not be transferred to, or from, the City of Oshawa. In the base case, no funds would
be transferred between jurisdictions. Over and above the base case, an incremental tax impact
was caicui2t0d in the event that Oshawa does participate in the road transfer process, as well as
an Increr.:;;;,Lal tax impact from repurposing.
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Financial Analysis
Tax impacts have been calculated to demonstrate the one time required change in the tax rate
today, in order to meet the funding obligation of each scenario over a nineteen-year period. It is
important to note that these changes to the tax rate are based on averages over the period and
therefore, on a year-by-year basis, actual funding obligations may vary significantly. The tax
impacts are expressed as changes for an average residential home with a current value
assessment of $200,000.
Refer to figures 1.1 - 1.5 on the following pages.
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"~~C_r'ifawnDa~~8DnQ~I~frOn1(eiClUiUna~asn~F3~~
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Pickering Capital 1$5.57\ $7.94 $2.37 -0.41% 1.115% 0.08%
Maintenance {$1.84 $4.11 $2.27 -0.14% 0.59% 0.08'10
Total 1$7.41 $12.05 $4.64 -0.55% 1.74'10 0.16'10
Ajax Capital 1$5.571 $2.63 $2.915 -0.41% 0.29% -0.10%
Maintenance {$1.841 ($0.75) $2.59 -0,14% -0.08% -0.08'10
Total 1$7.411 $1.88 $5.53 -0.55% 0.21% -0.18'10
Whitby Capital $5.571 $13.68 $8.10 -0.41% 1.67% 0.27'10
Maintenance $1.841 $1.49 {$0.351 -0.14% 0.18% -0.01'10
Total $7.411 $15.17 $7.76 -0.55% 1.86% 0.26'10
Oshawa - Capital 1$5.57 ($5.571 -0.41% -0.16%
Maintenance 1$1.84 1$1.841 -0.14% -0.05%
Total 1$7.41 ($7.411 -0.55% -0.22'10
Clarington Capital 1$5.571 $1.M 1$4.03\ -0.41% 0.19% -0.14'10
Maintenance 1$1.841 $0,11 1$1.731 -0.14% 0.01% -0.06'10
Total 1$7.41\ $1.615 1$5.761 -0.155% 0.21% -0.19'10
Scugog Capital $5.57) $12.76 $7.18 -0.41% 1.74% 0.215%
Maintenance $1.841 $9.79 $7.96 -0.14% 1.33% 0.27%
Total $7.411 $22.155 $15.14 -0.515% 3.07% 0.52'10
Uxbridge Capital 1$15.157 $- $5.57 -0.41% ..0/. -0.20'10
Maintenance {$1.84 $- $1.84 -0.14% -0/. -0.07'10
Total 1$7.41 $- $7.41 -0.55% -OJ. -0.27'10
Brock Capital $5.571 $24.19 $18.62 -0.41% 2.04% 0.55'10
Maintenance $1.841 $19.85 $18.01 -0.14% 1.67% 0.153'10
Total $7.411 $44.04 $36.63 -0,55% 3.71% 1.08'10
Reg Avg Capital 1$15.57 $5.83 $0.25 -0.41% 0.66% 0.01'10
Maintenance {$1.84 $1.93 $0.09 -0.14% 0.22% 0.00'10
Total 1$7.41 $7.76 $0.34 -0.55% 0.88% 0.01'10
*The Changes above reflect the estimated one-time change In taxes on an Average ReSidential Home With CVA= $ 200,000 for a 19
year net present value of cash flows for the no-way funding scenario. Note that actual year-by-year funding obligations may vary
significantly.
uOshawa transfers were not included in this projection therefore the Oshawa local levy will not change.
Total Tax Impact of Reprioritization (excluding Oshawa): This chart indicates the impact of
work identified by the receiving jurisdiction that is not different from the type of work identified as a
need by the current jurisdiction, for the base case no-funding scenario. The Regional average
tot'll tax impact of reprioritization on an average residential home with CVA =$200,000 is an
inc:,'<,: .. 0.01%.
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Tax Impact on Oshawa if included: This chart includes the impact of Oshawa's inclusion with
reprioritized work based on the needs identified by Regional roads needs estimates. The average
tax impact on an average residential home in Oshawa with CVA =$200,000 if Oshawa is included
is 0.98%.
Incremental Tax Impact of Including Oshawa on Regional General Levy: This chart reflects
reprioritization work with no funding transfers. Oshawa's inclusion only changes the Regional
General Levy in the other jurisdictions. The incremental impact of Oshawa's inclusion on the
Regional General Levy for an average residential home with CVA =$200,000 is a reduction of
0.80%.
The transfer of roads to Oshawa allows the Regional general levy to decline by $10.74 per
Average Residential Home with CVA = $200,000 across the Region. The Oshawa local general
levy, on the other hand, increases by $51.55 per average Oshawa household with CVA =
$200,000.
849
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Pickering Capital $0.96 $9.12 $10.08 0.07% 1.32% 0.35%
Maintenance {$1.841 $4.11 $2.27 -0.14% 0.59% 0.08%
Total {$0.881 $13.23 $12.36 -0.07% 1.91% 0.43%
Ajax Capital $0.96 $7.71 $8.67 0.07% 0.85% 0.28%
Maintenance ($1.841 1$0.75) ($2.591 -0.14% -0.08% -0.08%
Total 1$0.88) $6.96 $6.08 -0.07% 0.76% 0.20%
Whitby Capital $0.96 $13.68 $14.64 0.07% 1.67% 0.49%
Maintenance 1$1.841 $1.49 {$0.351 -0.14% 0.18% -0.01%
Total 1$0.881 $115.17 $14.29 -0.07% 1.86% 0.48%
Oshawa - Capital $0.96 $0.96 0.07% 0.03%
Maintenance {$1.841 {$1.841 -0.14% -0.05%
Total {$0.881 {$0.881 .0.07% -0.03%
Clarington Capital $0.96' $4.10 $5.06 0.07% 0.51% 0.17%
Maintenance ($1.841 $0.11 ($1.731 -0.14% 0.01% -0.06%
Total 1$0.881 $4.21 $3.33 -0.07% 0.153% 0.11%
Scugog Capital $0.96 $12.76 $13.72 0.07% 1.74% 0.47%
Maintenance 1$1.84) $9.79 $7.96 -0.14% 1.33% 0.27%
Total 1$0.881 $22.55 $21.68 -0.07% 3.07% 0.74%
Uxbridge Capital $0.96 $0.00 $0.96 0.07% 0.00% 0.03%
Maintenance {$1.841 $0.00 {$1.841 -0.14% 0,00% -0.07%
Total {$0.881 $0.00 {$0.881 -0.07% 0.00% -0.03%
Brock Capital $0.96 $24.1 g $215.115 0.07% 2.04% 0.74%
Maintenance {$1.841 $19.85 $18.01 -0.14% 1.67% 0.153%
Total {$0.881 $44.04 $43.16 -0.07% 3.71% 1.27%
Reg Avg Capital $0.96 $7.17 $8.13 0.07% 0.81% 0.27%
Maintenance 1$1.841 $1.93 $0.09 -0.14% 0.22% 0.00%
Total 1$0.881 $9.10 $8.22 -0.07% 1.03% 0.27%
Figure 1.4
"The Changes above reflect the esbmated one-time change In taxes on an Average Residential Home With CVA= $ 200,000 for a 19
year net present value of cash flows for the no-way funding scenario. Note that actual year.by-year funding obligations may vary
significantly.
Total Tax Impact of Repurposing including Reprioritization (excluding Oshawa): This chart
indicates the impact of the reprioritized road work and the work identified by the receiving
jurisdiction that is different from the type of work identified as a need by the current jurisdiction, for
the no-funding scenario. The Regional average total tax impact of all work identified by the
r~cE'iving jurisdiction on an average residential home with CVA =$200,000 is an increase of 0.27%.
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Total $0.88 $9.10 $8.22 ..0.07% 1.03% 0.27%
'The Changes above reflect lhe estimated one-time change in taxes on an Average Residential Home with CVA= $ 200,000 for a 19
year net present value of cash flows for the no-way funding scenario. Note that actual year-by-year funding obligations may vary
significantly. Repurposing excludes the transfer of roads with Oshawa as repurposing intents of Oshawa are unknown.
Incremental Regional Average Tax Impact of Repurposing (Excluding Oshawa**): This chart
isolates the impact of Repurposing from that of Reprioritizing for the no-funding scenario. The
incremental Regional average total tax impact of Repurposing on an average residential home with
CVA =$200,000 is an increase of 0.26%.
Regional Average Tax Impact of Repurposing including Reprioritization (Excluding
Oshawa**): This chart indicates the total impact of repurposing and reprioritizing the roads in the
receiving jurisdictions based on the needs identified by the receiving jurisdictions for the no-
funding scenario. The Regional average total tax impact of all work identified by the receiving
jurisdiction on an average residential home with CVA =$200,000 is an increase of 0.27%.
The impact of repurposing results in an incremental increase of $6.54 on the Regional general levy
from the base case of reprioritization but the total impact of repurposing combined with
reprioritization is still an overall reduction in the Regional levy of $0.88 per average residential
home with CVA of $200,000. The incremental impact measures the change from the base case of
reprioritization excluding Oshawa. On an average basis, the local levy increases incrementally
from the base case scenario of reprioritization by $1.34 per average residential home with CVA of
$200,000, which is comprised of incremental increases of $1.18 in Pickering, $5.08 in Ajax and
$2.56 in Clarington.
Qualitative Analysis
The major qualitative benefit of this business case is that direct accountability will be improved.
The realignment of the road network as a result of this process will allow for improved control and
responsiveness at all levels. Those roads that are local in nature in terms of purpose and usage
will be transferred 10 Area Municipal control. Similarly, the Region will assume control of those
roads that are major inter-municipal arterial roads in terms of purpose and usage. In both cases,
the roads will now be subject to the appropriate level of control, clarifying accountability.
851
24
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Conclusions
This business case demonstrates that the overall cost to the system for reprioritizing (excluding
Oshawa) is an average one-time tax increase of 0.01 % averaged over 19 years for an average
residential household with current value assessment (CVA) of $200,000. The Region sees a
significant reduction in currently planned road expenditures as a result of transferring roads to the
Area Municipalities. For Area Municipalities, the general result is an increase in the local levy but
the level of increase varies considerably between Area Municipalities, and could vary over time
based on short term funding requirements. There may be considerable fluctuations in funding
needs over the next five years for Area Municipalities.
In our opinion the overall cost to the system is justified based upon the resulting improvements in
alignment and accountability, as evidenced by the number of initiatives to improve roads
transportation in the Region that have arisen during the Stage 1 and Stage 2 processes.
Under reprioritization and assuming that Oshawa does not participate in road transfers, Ajax,
Clarington, Oshawa and Uxbridge show total tax (local levy plus general Regional levy) decreases.
Whitby and Pickering show total tax increases but the impact is not as significant as Brock and
Scugog.
This business case demonstrates further that the end cost to the taxpayer, even after road
repurposing, is an additional tax increase of 0.26% per average household with CVA of $200,000.
We believe that the rationalization of the existing road network should proceed according to the
proposal put forth by the WOW Committee. On that basis, it is recommended that the business
case be approved so that we can proceed to develop an implementation strategy. A key element
of the implementation strategy will be resolution of Oshawa's future participation, and dealing with
the negative impacts on Brock and Scugog. There are a number of other outstanding issues for
resolution during implementation strategy development, such as the coordinated timing of
development charge bylaws at all levels, and the timing of development charge road transfers.
Rej;uJII 1'./ Durham -Pllhll{ "OJ/.;.~ Rntwlltl!i;atim, l) t'
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25
852
1.2. Reaional Roads Maintenance Business Case
r:
p,
Refer to page 39 for the detailed report.
Background
The objective of the Regional Road Maintenance business case is to investigate the financial
impact and validate the qualitative aspects of performing maintenance of Regional Roads at the
Area Municipal level, as proposed in the WOW Stage I Report. Under this proposal, the Region
would continue to be the owner of the Regional road network; however, maintenance would
essentially be "outsourced" to the Area Municipalities. The Region would make payments to the
Area Municipalities for the maintenance services provided on Regional roads. Currently there are
several Area Municipalities providing various Roads Maintenance services on select Regional roads
within their jurisdiction, with costs charged back to the Region.
?
l
j
The original premise behind this business case was that it would be more effective for service
delivery of Regional Road Maintenance to be performed by Area Municipalities, since those new
responsibilities could be integrated with the existing responsibilities of maintaining Area Municipal
roads. Efficiencies were expected through improved utilization of both staff and equipment.
However, early in the business case development process, it became apparent that no immediate
operating efficiencies would be achieved. In addition, existing synergistic efficiencies would be lost
between Regional Road Maintenance and Regional Water and Sewer operations. (Water & Sewer
regularly co-ordinates with and uses Roads staff to assist in the repair of roads and sidewalks after
water or sewer work.) As such, the result of this business case is negative. Although the business
case is negative, there are opportunities to explore other avenues for operational efficiencies and
enhancements. These are outlined in the Conclusions section.
i
The remainder of this business case explains the approach undertaken and the assumptions
employed that yielded the negative result.
Approach
A methodology was developed for this business case that looked at the financial implications of
the proposal in terms of:
. The additional operating costs that Area Municipalities would incur to maintain all Regional
roads in their jurisdiction, relative to those saved by the Region;
. The impact of required expenditures on incremental vehicles, equipment and facilities;
. The impact of Area Municipalities billing their service delivery costs to the Region, inclusive of
an administrative fee; and
. The impact of severing the current synergies between Regional road maintenance and water
and sewer services.
For the business case the transfer of assets and employees from the Region to the Area
Municipalities was assumed to take place at zero cost. However, the practical feasibility of this
assumption wouid need to be re-examined during the development of an Implementation Strategy.
It is likely that additional costs would be incurred that would further reduce the value of the
business case.
The number of Regional road kilometers was calculated within each Area Municipality, which wa.j>
then used to estimate the incremental level of resources required in order to perform maintenanCe
activities on those roads. In addition to this, the Regional Water and Sewer group was asked to '
85,
26
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identify resource requirements that would be required in order for them to maintain their existing
levels of service.
Area Municipalities were assumed to take on the responsibility for maintenance of the Regional
road kilometers within their jurisdiction. In return, they received compensation from the Region for
the cost of providing the required maintenance plus an estimated 8% administrative fee. It was
further assumed that Regional Water & Sewer operations would need to hire staff and obtain
equipment to replace the effort currently provided by the Regional road crews.
Financial Analysis
Figure 1.6
~~~4J::;i~'~:f~~~~t3tt:~:~~~?
c,::"".",'i:Annual~.$. ;
" """,,-, '-"","},;,:;;i 'c; f:~:"~ ''';'~<}'''--;'-; .I',:!i 'w /:t;:"', .:>:/-':-;:~;;
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Pickering $6.63 ($2.07) $4.57 0.49'10 -0.30% 0.16% 1.90% $7.14 $11.71
Ajax $6.63 ($1.62) $5.01 0.49% -0.18% 0.16% 1.90% $7.14 $12.15
Whitby $6.63 ($1.14) $5.49 0.49% -0.14% 0.18'/, 1.90% $7.14 $12.63
Oshawa $6.63 ($2.64) $3.99 0.49% -0.22% 0.12% 1.90% $7.14 $11.13
Clarington $6.63 ($4.38) $2.25 0.49% -0.55% 0.08% 1.90% $7.14 $9.40
Scugog $6.63 ($5.57) $1.06 0.49% -0.76% 0.04% 1.90% $7.14 $8.20
Uxbridge $6.63 ($5,92) $0.71 0.49% .1.01% 0.03% 1.90% $7.14 $7.86
Brock $6.63 ($12.73) ($6.10) 0.49'/, -1.07% -0.18% 1.90% $7.14 $1.05
Reg Avg $6.63 ($2.88) $3.76 0.49% -0.32% 0.12% 1.90% $7.14 $10.90
'"The Changes above reflect the estimated one-time change in taxes on an Average Residential Home with CVA= $ 200,000 for a 19
year net present value of cash flows. Nate that actual year.by-year funding obligations may vary.
.. The Water Rates Impacts above reflect the estimated change for an average water and Sewer user that consumes 60,000
gallons/year.
The overall result of this business case is a net increase of $10.90 on an average residential home
(CV A =$ 200K) that consumes 60,000 gallons of water per year. This arises from an average
water user increase of $7.14 in water and sewer rates, in addition to a net general levy average tax
increase of $3.76 in the general tax levies. The Regional general levy increases by an average of
$6.63, approximately two thirds of which is attributable to the 8% administrative charge that the
Region pays the Area Municipalities over and above their costs of providing the service, with the
remainder attributable to the net increase in resources. However, this is countered by the fact that
the local general levy decreases by an average of $2.88, which is due to the fact that the Area
Municipalities recover their costs plus the 8% administrative charge. 8 5 4
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Contrary to the Stage I Report expectations, the business case is negative for this rationalization
initiative. There are two primary reasons for this result: limited efficiency gains in the planned
integration of Regional road maintenance with Area Municipality road maintenance; and, loss of
shared resources between Regional Water and Sewer and Roads and thus the need for increased
staff and equipment in Water and Sewer.
The limited efficiency gains in integrating Regional road maintenance with Area Municipality
maintenance are a result of:
· Given relatively small geographic areas, the estimates for Area Municipal incremental resource
requirements only yielded savings of parts of resources (e.g., 0.3 full time equivalents), rather
than whole bodies. In this instance, Area Municipalities took the conservative approach and
included full body complements as partial full time equivalents are not feasible;
· The Region will still require a number of supervisory positions in order to perform service
quality assurance activities.
· There are no savings in vehicle maintenance activities at the Regional level since vehicle
transfers are spread across all Regional depots and therefore the number of vehicles required
to be maintained per mechanic does not pass the threshold for staff reduction.
The increase in water and sewer rates is attributable to the increased costs incurred by the
Regional water and sewer operation that arise because the existing synergy with Regional roads
maintenance will be lost if the activities are transferred to Area Municipalities. This synergy
currently exists because the Region can call upon road crews and equipment to assist with water
and sewer projects on an as needed basis, in order to supplement demand on their own
resources.
Investigation revealed that Regional water and sewer operation requires an incremental number of
eleven full time equivalents and capital equipment purchases. This need is driven on a depot-by-
depot basis to have a crew of six avaiiabie to perform road-patching activities.
Qualitative Analysis
There are several qualitative aspects to this business case which counter, in some part, the
negative financial result:
. Public perception may improve as centralized routing within each Area Municipality may help to
avoid perceived duplication in activities; and
· Customer access will improve, as Area Municipalities will have control over all maintenance
activities within their geographic jurisdiction.
Conclusions
The primary intent of the transfer and consolidation of Road Maintenance was to improve
efficiency and effectiveness of road maintenance within the Region and local Area Municipalities.
The foregoing analysis indicates that there are no savings to be obtained at the maintenance
operational level. Key factors behind this conclusion include:
. i The inability of the Region and Area Municipalities to eliminate "parts" of resources; and
. The need for the Region to maintain supervisory positions to monitor Area Municipal
"contractor" performance (which continues to be necessary from a due diiigence/risk
management perspective).
RI';.:hm "J Our/mill -PuhJh "l)rk~ RatwmtU:;:,luioll I:!
23
8S5
In addition, the proposed change is also affected by inefficiencies introduced by separating parts
of the Regional Water and Sewer Division from its Road Maintenance counterpart. As a result, the
business case as proposed yields a negative result for the taxpayer because the lost synergies
currently available between Regional Road Maintenance and Water and Sewer operations
significantly outweigh the available operating efficiencies from performing all road
maintenance at the Area Municipal level.
Over and above the negative result as quantified in this report, there are a number of
implementation obstacles that would need to be addressed. Given the potential impact upon staff,
the transfer of road maintenance activities from the Region to the local Area Municipalities would
require considerable effort and resources to implement. Within the Region and Area
Municipalities, there are multiple Collective Bargaining Agreements, all with their own unique
features, raising a number of transition issues and challenges that would need to be overcome, In
addition to this, an equitable mechanism for vehicle transfers would have to be determined, formal
service level agreements would have to be negotiated, and performance measurement systems
developed jointly between the Region and the Area Municipaiities. All of these activities would
require an investment in staff time to complete.
It is iikely that resolution of these issues would increase the negative result of the business case.
As such, our recommendation is that this concept should not be pursued in its current form.
However, this exercise has highiighted the need to pursue maximum operating efficiency across
Area Municipal boundaries rather than solely within.
. A route optimization study should be investigated to provide inter-municipal opportunities for
potential efficiencies. This would help to alleviate individual Area Municipaiities' inability to
eliminate "parts" of resources since the reduction could be performed across more than one
Area Municipality.
. Discussions between the Region and Area Municipalities should occur to further investigate
and implement efficiencies in equipment and human resources.
. Currently, there are effective maintenance partnerships/ collaborations that exist between the
Region and Area Municipalities that may be evaluated and expanded. New partnerships
between the Region and Area Municipaiities may be created.
. Partnerships also currently exist between Area Municipalities and may be re-evaluated and
renegotiated to create additional operating efficiencies. New partnerships may also be created
between Area Municipalities.
. 856
29
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.1d, DeDot Rationalization Business Case
Refer to page 53 for the detailed report.
Background
The objective of the Depot Rationalization business case is to investigate the financial impact and
validate the qualitative benefits of rationalizing existing depot locations across the Region, as
proposed in the WDW Stage I Report.
Approach
Depot Rationalization was founded on the premise that the number of depots within the Region
could be reduced from the current level of twenty-two to fifteen in the short-term. As such, a
number of individual transactions have been identified that can be undertaken to provide value and
improve efficiency. The following transactions have been reviewed:
For Combinina (in the near future):
· NO.1 (Ajax Operations Centre) & No. 20 (Region - Ajax/Pickering Depot) - Ajax Operations
Centre operations to be located at Region's Ajax/Pickering Depot
· No.5 (Brock - Sunderland) & No. 18 (Region - Sunderland) - Brock Sunderland Depot
operations to be iocated at Region's Sunderland Depot
· No. 13 (Scugog - Port Perry) & No. 19 (Region - Scugog) - Scugog Port Perry Depot
operations to be located at Region's Scugog Depot
For Decommissionina (in near future, with staffing and equipment being redeployed):
. No.3 (Brock - Beaverton)
. No, 4 (Brock - Cannington)
. NO.6 (Clarington - Orono)
. No. 15 (Scugog -Island)
A methodology was developed for this business case that looked at the financial implications of
the proposed transactions in terms of:
. The change in capital costs and associated timing that would now be the responsibility of the
jurisdiction owning the depot, relative to those avoided by the jurisdiction that was moving;
· The on-going maintenance costs that would now be the responsibility of the Region as the
owner of the facility, relative to those avoided by the Area Municipalities; and
· The potential net proceeds from sale, rent or disposal of the decommissioned property. The
net valuation was calculated as a percentage of the current value assessment based on an
expected sale price. An 8% administration fee was also applied.
In order to develop this business case, several key assumptions were required to estimate future
cash flows. Assumptions included 20-year facility life spans for new construction, economic rents
paid by individual Area Municipalities occupying Regional facilities, the assumption that if
environmental liabilities exist, they do not represent an incremental change attributable to this
business case, and the assumption that new construction costs would be equal to construction
costs avoided by individual Area Municipalities with differences in timing of cash flows.
'-'857
80
Rj';;iml flf JJ,trJUlII/ -/'uhl;( ""rJ.~ R(I(wllilI1:(f(/(J/I 14
Financial Analysis
Figure 1,7
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"",~t,_.."i.>i ,..., .~~, "~"",,", enera-~' 'j m a or: on~ '*-..t\ZtM~"" " ,.,;:J:, -,- 'oliN
..'," "-~"'''''.''...,.v'' , ,.., '1 '. ,""""'-'!f.~~t.,..:.,,,,",,,~.,
,""- ,::, ~l.Wlif'ZJ:I"'4\mjjja ' .' ''$",' :lI'.Ji!i'j.~AnmiaJ; . e'!lb:;;"';,~':"
--;::',-/ ilonal~"'" '~~', ' 'l~~~', ," -' "
:;;':.;;;'~r;,,:< ,.~~~\, ~,,,,~!,', '''_i~_~''''f-M ..,. ,,~B !:ic6!Bj
. . enera , ' " Genei81,.., t;J .... . nera ' ?Geneltil ",. .'Total,
Pickering Capital $2.37 $0.00 $2.37 0.18% 0.00% 0.08%
Maintenance 1$2.601 $0.00 {$2.60l -0.19% 0.00% -0.09%
Total 1$0.241 $0.00 ($0.241 -0.02% 0.00% -0.01 %
Ajax Capital $2.37 ($4.44) 1$2.08) 0.18% -0.49% -0.07%
Maintenance 1$2.601 $1.30 1$1.301 -0.19% 0.14% -0.04%
Total 1$0.241 1$3.141 {$3.3BI -0.02% -0.35% -0.11%
Whitby Capital $2.37 $0.00 $2.37 0.18% 0.00'1'. 0.08%
Maintenance 1$2.601 $0.00 1$2.601 -0.19% 0.00% -0.09%
Total 1$0.241 $0.00 {$0.241 -0.02% 0.00% -0.01 %
Oshawa Capital $2.37 $0.00 $2.37 0.18% 0.00% 0.07%
Maintenance 1$2.601 $0.00 1$2.601 -0.19% 0.00% -0.08%
Total {$0.241 $0.00 {$0.241 -0.02% 0.00% -0.01%
Clarington Capital $2.37 {$0.361 $2.01 0.18% -0.04% 0.07%
Maintenance 1$2.601 $0.08 1$2.521 -0.19% 0.01% -0.08%
Total {$0.241 {$0.271 {$0.51l -0.02% -0.03% -0.02%
Seugog Capital $2.37 $0.45 $2.82 0.18% 0.06% 0.10%
Maintenance 1$2.601 $0.03 {$2.571 -0.19% 0.00% -0.09%
Total {$0.241 $0.49 $0.25 -0.02% 0.07% 0.010/.
Uxbridge Capital $2.37 $0.00 $2.37 0.18% 0.00% 0.09%
Maintenance 1$2.601 $0.00 1$2.601 -0.19% 0.00% -0.09%
Total 1$0.241 $0.00 ($0.241 -0.02% 0.00% -0.01 %
Brock Capital $2.37 {$12.181 ($9.82l 0.18% -1.03% -0.29%
Maintenance 1$2.601 $0.10 1$2.501 -0.19% 0.01% -0.07%
Total 1$0.241 1$12.081 1$12.321 -0.02% -1.02% -0.36%
Reg Avg Capital $2.37 ($0.98) $1.39 0.18% -0.11% 0.05%
Maintenance 1$2.601 $0.21 1$2.391 -0.19% 0.02% -0.08%
Total 1$0.241 1$0.77) {$1.011 -0.02% -0.09% -0.03%
"The Changes above reflect the estimated one-time change In taxes on an Average ReSidential Home With CVA= $ 200,000 for a 19
year net present value of cash flows. Note that actual year-by-year funding obligations may vary.
The costs for the depot analysis were broken into operating and capital components. The
combined figures yield the overall impact to the Area Municipalities. At the local level, variations
occurred due to the different depot rationalization scenarios that were proposed in the Stage 1
:e~<;1:.
858
31
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Qualitative Analysis
Depot Rationalization provides an opportunity for the Region and Area Municipalities to obtain
some "quick hit" economic benefits, as the Depot Rationalization process can be implemented on
a case-by-case basis.
Depot Rationalization enhances the efficiency of the overall depot network within the Region. The
net impact of the rationalization process will be fewer facilities to maintain. As a result, associated
operational costs will be eliminated or reduced. Administration of the depots will be enhanced, as
activities will be focused on a lower number of sites.
There are several instances in which works yards are located side-by-side, across the street from
one another, or there are several yards in close proximity to one another. Rationalization of
depots should improve this perception.
Conclusions
This business case has shown that, on an overall basis, the taxpayer will benefit from the Depot
Rationalization process. It is recommended that the Depot Rationalization process be undertaken
as proposed. The benefits of pursuing this initiative, include:
· Potential one time gains associated with facility disposal, or using the facility for another
purpose and avoiding other capital costs;
. Reduction of ongoing annual facility operating costs;
. Improvement in public perception relating to depots in close proximity; and
. Improved resource utilization.
There are several "quick hit" opportunities within the proposed depot framework as recommended
by the Stage 1 report. These opportunities are not large in magnitude; however, they provide an
opportunity to improve the overall efficiency and effectiveness of the various Public Works
functions located within Durham Region by reducing the number of depots from 22 to 15. This
effort should only be the precursor to future rationalization initiatives identified in the Stage 1
report, as well as any other opportunities that emerge in this area.
Since this business case was performed independently from the Road Network Rationalization and
Road Maintenance business cases, it is possible that some of the results as presented might
change. For example, if both the Road Network Rationalization and Road Maintenance business
cases proceed, some Area Municipalities have indicated the potential need for some depots
currently targeted for closure to remain open. However, final determination of requirements must
await detailed operational planning during implementation.
.)
859
32
Rl'giml f)J Dmflalll -PI/hit. "orli\ Ratumali:afitm I (I
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1.4. Solid Waste Collection Business Case
Refer to page 63 for the detailed report.
Background
The objective of the Solid Waste Collection business case is to investigate the financial impact and
validate the qualitative benefits of consolidating service delivery of all waste management services
at the Regional level, as proposed in the WOW Stage 1 Report. Over and above the intent to
demonstrate the currently available efficiencies in a single tier system, the objective is also to
demonstrate that additional savings could be achieved in a one-tier system, as increased levels of
diversion and source stream separation are required.
The business case does not examine the standardization of other levels of service. The ability to
implement standardization and the impact on Regional waste processing is not materially different
between one-tier and two-tier systems.
Approach
In an attempt to achieve a more effective and efficient service for Durham residents, the Solid
Waste business case explores several forward-looking scenarios. The scenarios are theoretical in
nature and examine the potential future impact of moving all waste management responsibilities to
a one-tier structure at the Regional level, and introducing new and standardized source streams of
waste management services across the Region. The scenarios do not define the service delivery
model that would achieve the efficiencies.
Some key assumptions used in the development of this theoretical business case include an
immediate 15% saving achieved in collection costs under a one-tier structure, collection stop
growth proportionate to the percentage increase in population, and the ability of the Region to
attain diversion goals by 2007. The 15% reduction in collection costs leads to an average cost per
stop in the Region of $37.50 which includes all costs, including yard waste and garbage collection.
In arriving at this saving, consideration was given to empirical data with respect to efficiencies in:
. Co-collection of waste streams - there are additional efficiencies available under a one-tier
system because the Region will be able to supplement its existing collection of blue boxes with
other source streams;
. Improved capital utilization arising from partial loads occurring less frequently; and
. Purchasing efficiencies arising from volume discounts as experienced in other similarly sized
municipalities.
860
'..
33
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Financial Analysis
Refer to Figure 1.8.
The tax impacts represent the theoretical one-time savings that would be generated today from
immediate adoption of the proposal. These will not be realized immediately though, due to the
existence of several long-term contracts and should be re-evaluated as a precise implementation
pathway is developed.
The cost savings that result from moving to a one-tier structure are largely driven by the
economies of scale achieved in the collection of waste. By administering two or three large
collection contracts instead of eight individual contracts, the Region can expect cost savings
through more efficient capital utilization, purchasing efficiencies, and co-collection of various
materials such as recyclables, organics and garbage. The overall collection savings achieved are
estimated to be approximately 15% of the current regional total. However, these savings are
estimated to occur at the regional level, which represents the weighted average of all Municipal
costs. Therefore, some Municipalities save more than others given their current contract costs for
collection and the impact collection costs have on their local general levies.
While enhancing current source streams will result in an overall cost increase to the Region, some
of these costs will be offset by downstream savings. Specifically, the costs to transfer and dispose
of waste will decrease as more garbage waste is diverted to the organics stream. For example,
excluding overhead, it costs the Region approximately $75 per tonne to transfer and dispose of
garbage waste. Alternatively, it costs the Region approximately $45 per tonne to compost
organics. With the introduction of food waste, this figure is expected to increase to approximately
$65 per tonne due to the additional cost of separating the food waste from the yard waste.
Therefore, the Region will save roughly $10 for every tonne of garbage that is diverted from
transfer and disposal to compost.
, 861
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34
Figure 1.8
'.F\~~~
~.... '..._.<.... ~",:....,..."... ".'~. _I,J"'" ~ .~
Pickering 2.84% -5.66% -$0.815
Ajax 2.84% -3.31% 0.26% $38.30 -$30.15 $8.15
Whitby 2.84% -4.74% -0.01 % $38.30 -$38.71 -$0.40
Oshawa 2.84% -3.94% -0.29% $38.30 -$48.13 -$9.83
Clarington Flat Rate- N/A N/A -0.27% $40.75 -$49.00 -$8.25
Scugog 2.84% -7.49% -0.57% $38.30 -$54.93 -$16.63
Uxbridge 2.84% -6.97% -0.09% $38.30 -$40.85 -$2.55
Brock 2.84"1. -5.36% -0.74"1. $38.30 -$63.59 -$215.29
Regional Avg 2.84% -4.04% -0.29% $38.30 -$35.80 -$9.06
Pickering $43.43 -$39.15
Ajax 3.22% -3.31% 0.43% $43.43 -$30.15 $13.28
Whitby 3.22% -4.74% 0.16% $43.43 -$38.71 $4.73
Oshawa 3.22% -3.94% -0.14% $43.43 -$48.13 -$4.70
Clarington Flat Rate - N/A N/A -0.09% $46.21 -$49.00 -$2.79
Scugog 3.22% -7.49% -0.39% $43.43 -$54.93 -$11.50
Uxbridge 3.22% -6.97% 0.09% $43.43 -$40.815 $2.158
Brock 3.22% -5.36% -0.159% $43.43 -$63.59 -$20.16
)
Regional Avg 3.22% -4.04% -0.12% $43.43 -$35.80 -$3.66
*The Changes above reflect the theoretical estimated one-time change in taxes on an Average Residential Home with CVA= $ 200,000
for a 10 year net present value of cash flows. Note that actual year.by.year funding obligations may vary. The savings as indicated are
the ultimate savings and will not be realized immediately, as contracts currently exist.
, .... T~'.,. iJ~:;i311 Regional tax rate is 2,84% however Clarington collects the amount lev;ed by the Region through a flat rate basis for
mainl\, residBntial properties.
*,. lh:.. ':'C'21ario excludes the capital costs required to implement enhanced source streams
86235
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I
I
Qualitative Analysis
Several factors were identified:
· Movement to a one-tier model will assist the Region in reaching its long term waste diversion
goal of 50% by 2007;
. Customer service will be enhanced as residents only have to deal with one level of
government; and
. Accountability will be more clearly defined as the realignment of the waste management
network will allow for improved control of all waste related services under one umbrella.
Conclusions
The results of this business case demonstrate that overall, the Region can save costs by moving
to a one-tier structure. More importantly, the Region can also enhance its current source streams
and still operate at a lower cost under a one-tier structure than it could by maintaining its current
two-tier structure with current source streams.
Given the highly theoretical nature of this analysis, and the present day realities that face waste
management in the Region of Durham, there are key challenges that exist with regard to the
implementation of this case. Currently, Oshawa and Whitby collect waste through their Area
Municipal operations. A one-tier model will have to develop a service delivery model that is
beneficial to all parties, yet still captures the cost savings projected in this business case. Ajax and
Pickering are currently under contract for waste collection until 2006 and 2009 respectively.
We recommend that this business case be approved so that an implementation strategy can be
developed to begin resolving the issues highlighted above.
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1.5. Enaineerina Development Approvals Business Case
Refer to page 77 for the detailed report.
Background
The objective of the engineering development approvals business case is to review the
engineering component of the development approvals process and investigate the concept of the
Area Municipalities taking the lead for processing engineering development applications, as
proposed in the Stage I Report.
Approach
Each Area Municipality and the Region was interviewed to determine the current process for
reviewing engineering development approvals. High-level process maps were developed to
describe the flow of the activities that occur throughout the review process. The City of Oshawa
was not interviewed since it declined to participate in this study.
To supplement the interviews, an external stakeholder workshop was conducted to identify the
perceptions and issues of the development and engineering consultant community. These issues
and perceptions were used to help identify opportunities for improvement in the current process.
The results of the interviews and the workshop were used to perform an "As-Is" assessment to
highlight key issues. The "As-Is" assessment was used to develop a "To-Be" process map from
which key process changes were identified and assessed for financial impacts.
As Is Process Assessment
The major finding from the As Is Assessment is that developers and engineering consultants must
travel to multiple locations to submit drawings and must contact multiple stakeholders to ask
questions and review project issues. In order to address the issues of multiple locations and
multiple points of contact, a one-point-of-contact approach was developed with the Area
Municipality as the lead.
To Be Process Design
The one-point-of-contact role wouid be filled by a project coordinator who would facilitate the
review process and answer any questions that the engineering consultant may have. This would
not be a new position, but rather a change in responsibilities and emphasis.
The project coordinator should be a current Area Municipal employee who facilitates the
submission and feedback process with the development community. All issues and concerns
would be compiled and communicated to the project coordinator from the Region and the Area
Municipal reviews. The project coordinator would communicate the issues and comments to the
development community following the engineering review, and would review the submission on an
on-going basis, to ensure that all concerns previously identified, have been addressed.
Since the developers' building schedules are impacted by delays in the review process, a standard
review cycie should occur with an established time line (provided all required information is
submitted). In a similar fashion though, the development community should adopt it's own
performanre standards in terms of submitting drawings early enough in the building schedule.
The deve'~lpment community must also set and meet standards for complete inclusion of required
inform:", c This would help to smooth the impact of peaks in demand on review services. 8 6 4
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To reduce rework and overall effort, the project coordinator should meet with the engineering
consultant to review the issues and comments at the end of a submission cycle and again prior to
the detailed engineering review. This will ensure that submissions are complete and that the
engineering drawing addresses the issues that have been identified by the Area Municipal and
Regional review.
Financial Analysis
The new process of reviewing engineering designs would not significantly affect the Area
Municipality or the Region.
Some Area Municipalities currently use engineering consultants to review drawings submissions
and would therefore use an engineering consultant to facilitate the project coordination process, as
the consultant has more knowledge of the engineering review process. In this situation, the
consultant fees are directly charged back to the developer thereby removing the financial impact
on the Area Municipality.
The process change would not financially impact the Area Municipalities or the Region because in
most cases an existing employee would facilitate the one-point-of-contact role. The project
coordinator role is simply a change in responsibility with some time devoted to aiding
communication between the reviewing entities and the developer. Engineering plans and
comments would be exchanged at meetings so additional courier costs would not be incurred.
The cost of travel for Regional technicians would be minor as there would be one meeting per
submission required.
If the Area Municipality is unable to satisfy the resource requirements with the current level of staff
then there may be a need to increase staff levels. In this case, there is still an opportunity to
charge the project coordinator resource costs back to the developer by reviewing the fee structure.
There should be full cost recovery for the review process based on a user pay approach. This is
an issue that will need further review in the implementation plan.
Qualitative Analysis
There are additional qualitative customer service issues that would be improved by the process
changes as proposed.
In keeping with the one-window approach, one-point-of-contact would ensure that the developer's
questions are answered in a timely fashion. The project coordinator's role would be to facilitate
the review process and to answer any questions that the developer may have. This would allow
the developer to contact a single party to ask questions and would make that party accountable for
responding.
The changes, as proposed, would help to promote the culture that the Region, the Area
Municipalities and the development community are working together to achieve a common goal.
This would help to address the developers concerns that the current review process impedes their
ability to deliver their product on time.
As such, the process changes result in the development community receiving better customer
service from the Region and the Area Municipalities.
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Conclusions
The review identified the required process changes to achieve a one-window approach with each
jurisdiction required to maintain responsibility and accountability for their respective engineering
decisions and associated financial control. The key components to these additional steps are
communication between reviewing levels and communication with the development community
through a one-point-of-contact approach.
Our review indicated that all process changes would have a very minor, if any, cost impact, such
that a detailed cost analysis was not deemed necessary. The process change would not
financially impact the Area Municipalities or the Region because in most cases an existing
employee would facilitate the one-point-of-contact role, The project coordinator role is simply a
change in responsibility with time devoted to aiding communication between the reviewing entities
and the development community. However, if it becomes apparent during Implementation
Strategy development that some Area Municipalities might incur incremental costs, these should
be identified and quantified at that time.
The change would not be difficult to implement, as there is no change to the current engineering
review or fee collection methodology. However, if Area Municipalities require assistance in
facilitating the new process, there is an opportunity to have engineering consultants act on behalf
of the Area Municipalities or the Region to facilitate the review process.
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1.6 WEED CONTROL ACT ENFORCEMENT
EXECUTIVE SUMMARY
Enforcement of the Weed Control Act is currently a Regional responsibility.
During the Stage I Review it was seen by the WOW Committee to have potential
benefits if transferred to the local area municipal level, therefore the concept was
proposed for study during Stage II.
This business case has identified the benefits of transferring Weed Control
Enforcement to the Area Municipal level as being largely qualitative in nature.
These qualitative benefits are reviewed in detail in section 5, however the main
benefits can be summarized as:
. the ability of the local municipality to determine and direct its own level of
service
. enhanced efficiency through elimination of the need for the Regional Finance
Department to be involved in invoicing for cuts and processing/tracking
delinquent accounts for reimbursement through the property tax process.
. Possible public perception and customer service enhancements.
There are no significant financial benefits to transferring the weed control
function. Inspections and mowing costs are generally recovered through fees
charged to offending property owners. Total net costs to the Region are about
$20,000 annually. This is predominantly for clerical/administrative costs that are
a portion of the portfolios of two existing fulltime positions. These positions
would not be eliminated if weed control enforcement transferred to the Area
Municipal level.
In addition, when extrapolating inspection/mowing costs and recoveries (which
would transfer), the net cost savings to the Region would be $1,000, based on
2001 projections.
WOW Committee Members consulted'with their respective By-Law Enforcement
colleagues and all are receptive (although not overly enthusiastic) to assuming
responsibility for Weed Control Act enforcement. Those with lesser volumes of
weed inquiries/complaints indicated they would utilize existing internal resources
to administer the programs, while others with larger volumes of calls indicated
they would contract with the existing seasonal Weed Inspectors to investigate
inquiries and resolve complaints. It should be noted that, since Oshawa has
declined to participate in the Stage II Review, their position on this matter is not
known.
Through discussion of this business case, WOW Committee Members concluded
that, overall, there is no significant positive benefit to transferring Weed Control
· 867
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Act enforcement to the Area Municipal level as the program is currently working
effectively and there is no material financial benefit to be gained by a change.
The WDW Committee therefore recommends:
THAT enforcement of the Weed Control Act remain the responsibility of the
Region of Durham to coordinate and administer.
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1.7 ROAD-RELATED PERMITS
EXECUTIVE SUMMARY
During the Stage I Review, the WOW Committee saw possible benefits to
examining a "one-window" approach to receiving and processing road-related
permit applications. By this it was envisaged that an applicant could go to any
municipality within the Region to complete a standardized formes), and could also
have permits that cross municipal boundaries processed at one location.
The most common types of road-related permits are "Entrance" and "Road
Occupancy" permits (ie for access onto a municipal road from a property owner
and/or for uses such as moving over-sized loads, temporary road closures, utility
installation/maintenance (hydrolbeIVcable), and special events/filming.)
Reference Schedule A for an overview of current road-related permits and
practices.
The WOW Committee has determined that the main benefit to introducing a one-
window approach to road-related permit processing would be qualitative in nature
-- specifically, enhanced accessibility. There would be no financial benefit. In
addition, the one-window approach would be less efficient than the present
system, as permits issued and fees collected by one municipality on behalf of
another would require public works training/coordination in other municipalities'
permit processes, and would also involve Finance Departments in the accounting
and transfer of payments.
There are, however, a number of ways in which customer service and public
accessibility can be enhanced, with much less time and effort than pursuing the
one-window approach:
· The Region could provide Area Municipalities with basic information about
its road-related permits (ie processing/contact information and a supply of
forms) in the event a local applicant needs a Regional permit, also.
· Similarly, Area Municipalities could provide the Region with basic
information about their road-related permits in the event an applicant needs a
local permit, too.
· In the case of over-sized/over-weight load moving permits, the Ontario Good
Roads Association, in conjunction with MTO and the Ontario Truckers
Association (OT A) is currently exploring the interest and feasibility for a
computerized "one-window" province-wide system, that would provide the
necessary customer service/accessibility for truckers that the WOW
Committee sought to provide inter-municipally. This initiative should be
869
42
supported and encouraged, and each municipality should participate in the
OGRA survey.
. Forms could be standardized and printing requirements jointly tendered, thus
also enhancing economies of scale.
. Requirements could be standardized (ie for entrance permits, utility/other
consents, etc.), where possible.
. Fees could be reviewed with a view to standardization where
possible/feasible.
In summary, the WDW Committee has concluded the Business Case examining
its original concept of a full-scale one-window approach to road-related
permitting, as proposed during Stage I, to be more negative than beneficial, but
that specific enhancements targeted to customer service and accessibility should
be pursued. It therefore recommends:
"THAT a "one-window" approach to road-related permit processing not be
pursued;
THAT the WDW Committee facilitate introduction of customer
enhancements to road-related permitting, as detailed above and
Conclusions Section (7) of this Business Case."
service
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VEHICLES & EQUIPMENT PURCHASING
EXECUTIVE SUMMARY
The Stage I Report recommended that "the feasibility of purchasing vehicles and
equipment on a co-operative tender basis be investigated further, and that a
business case be developed in consultation with the Durham Purchasing Co-
operative (municipal purchasing agents.)"
In discussion with the Durham Purchasing C.o-operative, the following
comments/suggestions to further the joint tendering effort have been determined:
· There is benefit to having a cooperative tender. Dealers would have one
comprehensive bid document outlining all region-wide requirements (at least
for those municipalities that have a desire to participate in the joint tender),
and it may result in more competitive pricing and interest from a wider pool of
dealers.
· Share capital budgets with Co-op members as early as possible, as this would
allow for identification of common purchases for the coming year.
· Summarize capital budgets and forecasts as they relate to vehicles, equipment
and ancillary capital purchases (similar to Schedule B, attached), as this
provides an easy-reference "snapshot" for determination of common
purchasing needs.
· Create a Committee of staff, knowledgeable about the vehicles/equipment
planned for purchase, to work on standardizing specifications to the extent
possible/feasible.
· Seek pre-budget approval for vehicle/equipment tenders at a common
timeframe to facilitate the joint tendering process from a timing perspective
and ensure sufficient lead-time and ability to secure the current model year for
vehicles.
In addition, the Durham Purchasing Co-operative has offered a representative to
work in conjunction with the WDW Committee to further co-operative purchasing
opportunities.
The wnw Committee has concluded there is merit in pursuing joint tendering of
vehicles and equipment, and appreciates the input and suggestions from the
Durham Purchasing Cooperative and welcomes their assistance. To this end, the
wnw Committee recommends:
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"THAT the WDW Committee facilitate the formation of a committee of public
works staff to work in consultation with the Durham Purchasing Cooperative to
effect the suggestions outlined in above and in Section 3.3."
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ANCILLARY RECOMMENDATIONS
FROM STAGE I REPORT
BACKGROUND & SUMMARY
As part of the Stage I Report, the wnw Committee made two recommendations
that did not require further study. To ensure reporting on all recommendations
emanating from the Stage I Report, these two recommendations are discussed, in
brief, below, and are respectfully submitted for formal consideration as part of the
Stage II Review.
On-going Review of Road Network and Depot Locations
During Stage I and again throughout Stage II, the wnw Committee identified the
need and merit for a mechanism to periodically review the road network and
depot locations.
The road network would continue to evolve with growth throughout the region,
and there would be changes in usage and traffic patterns. As was demonstrated
throughout this study, some Regional roads may become more "local" in use and
some local roads may become more "regional" in nature in terms of
interconnectivity and traffic flow across municipal boundaries. Similarly, depot
facilities will require upgrade or expansion over time, or new locations may be
required. Both the road network and depots are significant business programs of
the municipalities. As with any business program, there should be a mechanism
for periodic review and evaluation. The wnw Committee presents a cooperative
forum for this to occur. It therefore respectfully recommends:
THAT the Public Works Officials' WDW Committee be the forum for on-going
review and rationalization of the road network and depot locations to provide a
periodic evaluation mechanism for these business programs.
Lead on Infrastructure Projects
During the Stage I Review, the wnw Committee identified that the current
practice of collaborating with one another on construction projects involving two
jurisdictions could be further enhanced. Specifically, it was felt there were
benefits to having one party coordinate the entire capital project. The WDW
Committee agreed that the proponent/initiator of a construction project involving
another jurisdiction(s) (such as watermain replacement or road reconstruction)
should take the lead in design, construction supervision and contract
administration throughout the project. The benefits were seen to be reduced
collective staff time and reduced timeframes for the project schedule.
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To a large extent this value-added practice has been implemented and has been
further discussed and refined during the Stage II Review. The wnw Committee
wishes to formalize this practice and respectfully recommends:
THAT the proponent/initiator of an infrastructure project involving more than one
municipality take the lead in the design, supervision of construction and contract
administration throughout the project, subject to agreement from Area
Municipalities.
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Fiaure 3.1 - Proposed Road Assumptions
ROAD FROM " TO' ',',' CURRENT PROPOSED
",' , ."STATUS STATUS'
Whites Road Bayly Street South Limit Regional City of Pickenng
RR 38 RR22
Brock Road Bayly Street South Limit Regional City of Pickering
RR 1 RR22
Finch Avenue Altona Road Brock Road Regional City of Pickering
RR37 RR27 RR 1
Liverpool Road Kingston Road Finch Avenue Regional City of Pickering
RR29 Reoional Hwv #2 RR37
Church Street Bayly Street Kingston Road Regional Town of Ajax! City
RR24 RR22 Reaional Hwv #2 of Pickerino
Westney Road Bayly Street Harwood Avenue Regional Town of Ajax
RR31 RR22 RR44
Rossland Road Brock Road Cochrane Street City of Regional
RR 1 RR 43 Pickering/
Town of Ajax!
Town of Whitby
Harmony Road Courtice Road City of Oshawa/ Regionai
RR33 RR34 Municipality of
Clannaton
Thickson Road Victoria Street Wentworth Street Regional Town of Whitby
RR26 RR22 RR 60
Cochrane Street Rossland Road Dundas Street Regional Town of Whitby
RR43 RR28
Henry Street Dundas Street Victona Street Regional Town of Whitby
RR45 RR22
Brock Street Victoria Street South Limit Regional Town of Whitby
RR46 RR22
Hopkins/Anderson Rossiand Road Consumers Drive Regionai Town of Whitby
RR 36 RR25
Wentworth Street Thickson Road Stevenson Road Regional Town of Whitby/
RR60 RR26 RR52 City of Oshawa
Park Road Farewell Street Regional City of Oshawa
RR54 RR 56
Thornton Road Taunton Road Champlain Regional City of Oshawa
RR 52 RR4 Avenue
RR25
Phillip Murray Wentworth Street Park Road Regional City of Oshawa
Avenue RR 52 RR60 RR54
Stevenson Road Rossland Road King Street Regional City of Oshawa
RR 53
South limit of Hwy Phillip Murray Regional City of Oshawa
401 Corridor Avenue RR 52
Simcoe Street Bloor Street Harbour Road Regional City of Oshawa
RR2 RR22 RR 62
Harbour Road Simcoe Street Farewell Street Regional City of Oshawa
RR 62 RR2 RR56
Farewell Street Harbour Road Bloor Street Regional City of Oshawa
RR 56 RR 62 RR 22
Ritso n Road Winchester Road Wentworth Street Regional City of Oshawa
RR16 RR 3 RR 60
Wilson Road Taunton Road Bloor Street Regional City of Oshawa
RR 35 RR4 RR 22
Main Street Taunton Road South Limit Regional Municipality of
RR 17 RR4 Clannoton
Shoreline Road Mara Road North Limit Regional Township of Brock
RR47 RR23
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... " . STATUS STATUS
Old Hwy 12 Hwy 12 North Limit Regional Township of Brock
RR51
Canal Road Old Hwy 12 Hwy 48 Regional Township of Brock
RR50 RR51
Harwood Avenue Kingston Road Lake Driveway Regional Town of Ajax
RR44 Reoional Hwy #2
Carruthers Creek Kingston Road Bayly Street Town of Ajax Regional
Drive Reoional Hwv #2 RR22
Glbb StreeU Olive Thornton Road Townline Road Regional City of Oshawa
Avenue RR52 RR55
RR 59
Park Road Rossland Road Phillip Murray Regional City of Oshawa
RR54 Avenue RR52
Island Road Hwy 7A North Limit Regional Township of
RR 7 ScuQog
Hwy47 Concession 6 Donland Avenue Township of Regional
UxbridQe
The City of Oshawa declined to participate in the development of this business case. This is
significant since the Stage 1 proposal (in which Oshawa did participate) called for a total of 176.5
lane kilometers to be transferred from the Region to Oshawa. The results of the business case
have been prepared so as to identify the impact of excluding and including Oshawa from the
analysis.
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