2005 Audit Recommendations  -  Status Tracking
Document 3
Audit:  Real Estate Management  (EMC Lead:   S. Finnamore / Staff Lead: B. Robinson)
  Audit Recommendation Management Response Comments  Budget Implications
2007 or Beyond		 Related Council Motions Status Update
    Audit Management Response Action Required Based on DCM Implementation Plan Management Timelines    (Q1- Q4) (Risks, issues regarding implementation, etc) ($$ if known)    
1 That the overall objective of property disposals be clarified, including clarification of the relative priorities regarding sale versus other potential uses for the property. Management agrees with this recommendation.

The Disposal Policy approved in October 2001 by Council, will be reviewed for clarity of wording as part of the annual review of disposal procedures to be completed in 2006.

Ultimately, Management’s goal is to present objective information to aid Council in setting priorities specific to surplus property. The review of the Disposal Policy will address the need to develop a more formal approach for land exchanges. The objective would be to ensure that any surplus real estate is viewed as an asset and utilized in a manner that recognizes its financial value and rationalizes its use in relation to the City’s overall requirements.		 New sales and negotiation handbook is being developed, which will identify potential issues for clarification. If required, these will be addressed as part of review of the Disposal Policy in 2007. Q2 2007   None Yes (revisions to Disposal Policy will require Council approval.) Sept 2007 - Complete

May 31/07 - The Disposal Handbook has been completed and is being reviewed by Legal. Any revisions to the Disposal Policy will be considered in conjunction with Bill 130.

In progress. Issues identified in creation of new RESD Handbook (see recommendation #2) will also be incorporated in Disposal Policy, as required.
2 That Management establish clear guidelines on the appropriate selection of various methods of sale and associated negotiation protocols. Management agrees with this recommendation.

Management proposes the development of a sale and negotiations handbook to be completed by Q4 2006, that documents disposal options available and outlines the criteria to be considered when selecting a marketing method.		 A Sale and Negotiations Handbook, that will document disposal options as well as outline criteria for selecting an appropriate marketing method, will be developed as a working tool for staff. Q4 2006   None No Complete
3 That Management establish a requirement for the use of a proposal call or public tender process for all disposals involving high dollar values and/or multiple bidders. Management agrees with this recommendation.

Current practices and procedures with regard to the use of proposal calls and/or public tenders will be reviewed and revised as part of the annual review of the current disposal procedures and incorporated into the sale and negotiations handbook, addressed under Recommendation 2, to be completed by Q4 2006.		 Current practices will be reviewed and revised as part of the annual review process and incorporated into the Sale and Negotiations Handbook. Q4 2006   None No Complete
4 That Management ensure appropriate policies and procedures are put in place for Acquisitions, Leasing, Appraisals and Remediation to ensure a consistent and effective approach that reflects best practices is maintained. Management agrees with the recommendation.

The development of an Acquisition Policy, including leasing, will be completed by Q2 2006.

The need for appraisals and environmental site assessments is currently captured in the Disposal Policy and will be entrenched in other policies and practices as developed.		 Management are developing an Acquisition Policy which will include leasing.

The need for appraisals and environmental site assessments is currently captured in the Disposal Policy and will be entrenched in other policies.		 Q4 2006 (or Q1 07 for presentation to Committee and Council. Policy now completed by RESD.) The requirement for appraisals and environmental site assessments is entrenched in the new policy. Procedures for the various lines of business will be included in the RESD Handbook. None Acquisition Policy to be presented to Council in Q4 2006 or Q1 2007 Sept 2007 - Acquisition Policy was approved by Council on April 11, 2007.

May 31/ 07 - The Real Property Acquistion Policy was approved by Council on April 11/07. Drafts have been completed for the Leasing and Environmental Modules and will be completed in Q4 07.

Acquisition Policy to be presented to CSEDC on April 3/07 and Council April 11/07.
5 That Management implement a standard protocol for responding to inquiries as well as an improved tracking mechanism to capture all relevant information including the source, the staff assigned and the time committed to resolving each request. Management agrees with the recommendation.

An upgrade to the Corporate Inquiry Tracking application is currently underway and is anticipated to be completed by Q4 2006.
 An upgrade to the current inquiry tracking application is currently underway. Q4 2006   Not yet determined.

Any budget implications will be reflected in Branch Process Review recommendations.		 No Complete. 
RESD now has an improved protocol for responding to and tracking inquiries. All inquiries are directed to one point of contact who tracks and coordinates the appropriate responses.
6 That the property management responsibilities currently assigned to the Real Estate Services Division be transferred to either the Program Properties Division or the Venture Properties Division of Real Property Asset Management. Management agrees with the intent of this recommendation.

A review of the alternative service delivery options and the required resourcing will be completed by Q3 2006. Any resourcing issues, additional FTEs or contract dollars, will be addressed in time for the 2007 budget process.		 A review of ASD options and required resourcing is underway. Q3 2006 Property management requirements associated with the Corp. Admin. Portfolio would be best aligned with the Venture Properties Division where a combination of internal trades staff and external contractors could be accessed to deal with the various service requests.  In order to address Recommendation #6, no existing RESD staff resources can be transferred to VP therefore, supervision of these added responsibilities will be reallocated to existing staff resources. None No May 31/07 - Complete.  Any day-to-day maintenance work will be contracted to Venture Properties but RESD will continue to manage the portfolio. No further action is required.

Analysis complete.  Reallocation of responsibilities will begin at the beginning of Q2-2007. On-call responsibilities for corporate portfolio have been transferred to Venture Properties effective Dec 1/06.
7 That Real Estate Services amalgamate its leasing responsibilities within its internal structure. Management agrees with this recommendation.

The organizational structure in place at the time of this audit aligned leasing-out activities (revenue leases) with disposals, and lease-in activities with acquisitions. The intent of this alignment was to balance workloads within RESD. As an interim step to an organizational review, revenue and acquisition leasing will be consolidated in Q1 2006, to allow for standardized business processes and increased
focus of knowledge and expertise.

Real Estate Services Division will be reviewing the alignment of positions during the Branch Process Review Program which is targeted to be completed in Q3 2006.		 This is will be assessed under Recommendation #6. Q3 2006 The transition is being made and will be complete once Recommendation #6 is complete. Included in Recommendation #6. No May 31/07 - Complete.  This matter has been reviewed and the decision is to keep the two functions separate and improved lines of communication are now in place. No further action is required.

Review completed, however, resourcing required, as indicated in Recommendation #6. Completion pending reallocation of internal resources, anticipated in Q2 2007.
8 That Management, in concert with the Information Technology Services Branch, implement the use of available corporate system tools to provide required database management support. Management agrees with this recommendation.

The RPAM Business Case, Version 1.0, indicated that Real Estate Services Division (RES) would be included in the Project System (PS) Module implementation. However, as the Real Estate Services Division had to concurrently develop and implement the Real Estate Module, it was determined that there was not enough capacity within the Division to develop the PS Module as well. At that time, the Comprehensive Asset Management Division (CAM) was substituted for RES in the PS module implementation. A review of the potential application of the PS module to address project management-tracking requirements and costs associated with the application is planned for Q2 2006.		 A review of the potential application of the PS module to address project management-tracking requirements  and costs is scheduled for this year. Q2 2007 As of Jan.1/06, RESD implemented time tracking which will form the platform for SAP-PS which will begin development early in 2007. None No May 31/07 - Pending outcome of Business Process Review.  Anticipated completion Q2 2007.

Sept 2007 - The division is re-evaluating the appropriateness of using the PS module to meet the needs required.
9 That Management develop and implement a system of key performance indicators based on operating standards to facilitate efficient service delivery and validate potential workload issues. Management agrees with this recommendation.

Management agrees that meaningful performance indicators are required to estimate and budget for resource requirements and to track divisional performance. The development of these indicators and appropriate planning standards will be completed by Q4 2006.
 Performance indicators and planning standards will be developed. Q4 2006 RESD is working with other municipalities in Ontario to develop Performance Measure Indicators. None No May 31/07 - In progress.   Progress of all municipalities behind schedule, therefore completion now anticipated in Q3 2007.  

Sept 2007 - completion now anticipated in Q4 2007.
10 That Management establish a checklist and sign-off procedure to ensure that documentation of all activity is complete and accurate. Management agrees with the intent of this recommendation.

A review of similar issues from a previous disposal audit in 2004 indicated that the majority of the issues associated with files did not warrant a significant amendment to practices.

To ensure that files are fully and properly documented, a checklist has been developed and implemented.		 A check-list has been developed and implemented to ensure all files are properly documented. Q1 2006   None No Complete
11 That Management undertake, in concert with key client departments, an annual or multi-year planning process to identify and plan for future real estate service requirements. Management agrees with this recommendation.

It is currently difficult to pre-plan RESD’s client-driven workload within one budget cycle. The capital budget process tends to be completed in a compressed timeframe, often in isolation. This issue occurs mainly with acquisitions for major capital infrastructure projects.

RESD staff will initiate a semi-annual workload review and analysis with clients to review project timing to allow input for resource costs in capital project budget preparation. These reviews, coordinated with the corporate budget cycle, will allow RESD to identify staffing pressures as part of the annual operating budget pressure identification.		 RESD staff will initiate a semi-annual workload review and analysis with clients to review project timing. These reviews, coordinated with the budget cycle, will allow staff to identify pressures as part of the operating budget. Q2 2006 This was done as part of the LRFP Budget process. None No Complete
12 That Management pursue opportunities for more formal outsourcing of services to minimize the ongoing use of consultants and address succession planning limitations. Management agrees with the intent of this recommendation.

To address the balance of the workload currently being provided by internal staff, RESD is currently using individual contractors, acquired through a standing offer, to meet day-to-day workload requirements.

RESD’s lines of business and mandate will be reviewed as part of a Branch wide Process Review Program including an organizational assessment and staffing strategy planned for Q3 2006.		 RESD is currently using individual contractors to meet daily work requirements.

An organizational assessment and staffing strategy is planned.		 Q3 2006 RESD will be recommending the creation of two FTE's to save on the ongoing consultant costs since amalgamation. Council approved the two FTE's as part of the 2007 Budget and the positions are being advertised. No May 31/07 - Complete
Council approved the creation of two FTE's in the 2007 budget. One position is now filled and interviews are being held next week for the Admin position. As well, Council on May 23/07 as part of the Branch Process Review approved 2 addional FTE's to reduce consulting costs related to real estate appraisal and environmental remediation. No further action is required.