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1. OPERATIONAL
BUDGET REVIEWS FOR ADMINISTRATIVE SERVICES - EXAMEN DES BUDGETS DE FONCTIONNEMENT DES SERVICES
ADMINISTRATIFS - SERVICES JURIDIQUES |
Committee Recommendation as amended
That Council
approve the final 2008 Operational Budget of the Legal Services Branch, as
amended by the following:
1. That the
Legal Services Budget be reduced by $80,000 (1.6 FTE’s) as per the Budget
Reduction Option – Risk Management.
RECOMMANDATION MODIFIÉE DU
COMITÉ
Que le Conseil approuve le budget
final de fonctionnement de 2008 des Services juridiques, tel que modifié par
ce qui suit :
1. Que
le budget des Services juridiques soit réduit de 80 000 $ (1,6 ETP)
conformément à l’Option de réduction du budget – Gestion des risques.
Documentation
1. City Council report dated 31 January 2008
(ACS2008-CMR-CSE-0005).
2. Extract of Draft Minute, 8 February 2008.
Report to / Rapport au :
Long Range Financial Plan Sub-committee
Sous-comité du plan financier à long terme
and Council / et au Conseil
Submitted by/Soumis par : City Council / le Conseil municipal
Contact
Person/Personne ressource : Diane Blais,
Committee Coordinator / Coordonnatrice du comité
City
Clerk’s Branch / Direction du greffe
(613)
580-2424 x, 28091
Diane.Blais@Ottawa.ca
SUBJECT:
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OPERATIONAL BUDGET REVIEWS FOR ADMINISTRATIVE SERVICES
- LEGAL SERVICES |
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OBJET :
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EXAMEN DES BUDGETS DE FONCTIONNEMENT DES SERVICES ADMINISTRATIFS - SERVICES JURIDIQUES |
That the Long Range Financial Plan Sub-Committee recommend Council approve the final 2008 Operational Budget of the Legal Services Branch, as presented in the attached updated 2008 operating budget pages.
Que le Sous-comité du plan financier à long
terme recommande au Conseil d’approuver le budget final de fonctionnement de
2008 des Services juridiques, tel que présenté dans les pages mises à jour du budget de fonctionnement
de 2008 ci-jointes.
In December 2007, during its deliberations on the 2008 Budget, Ottawa City Council approved a motion calling on the Long Range Financial Plan (LRFP) to conduct operational budget reviews for administrative services.
At its 9 January 2008 meeting, Council considered and approved a subsequent motion, which amended the schedule for the LRFP’s review of the various branches.
In order to assist the LRFP in
its work, Financial Services staff has provided updated budget pages for the various branches being
reviewed. These pages have been revised
to reflect any changes approved by Council during its budget deliberations.
The budget pages for the Legal Services Branch are attached to this report and are numbered sequentially, however they also include the reference page to the 2008 Draft Budget document in case members of Council have made notes in their budget books and want to refer to them.
This item will be advertised in the local dailies as part of the Public Meeting Advertisement on Friday preceding the Long Range Financial Plan Sub-Committee Meeting.
Any changes approved by Council
will amend the City’s 2008 Operating Budget.
Document 1 - Updated 2008 Operating Budget Pages - Legal
Services
Staff from the various branches
to implement any changes approved by Council.
OPERATIONAL BUDGET REVIEWS FOR ADMINISTRATIVE SERVICES - LEGAL SERVICES
EXAMEN DES BUDGETS DE FONCTIONNEMENT DES SERVICES ADMINISTRATIFS - SERVICES JURIDIQUES
ACS2008-CMR-CSE-0005 City Wide / À l'échelle de la ville
Mr. R. O’Connor, City Solicitor, spoke to a PowerPoint presentation in which he outlined his branch’s mandate, cost, structure, staff levels, service areas, performance results, cost comparators, efficiency targets, and savings opportunities. A copy of his presentation is held on file.
Responding to a question from Mayor O’Brien, Mr. O’Connor explained that although the hourly rate for external legal services had been reduced by 20%, this had not translated into over-all savings because the amount of work being done had increased significantly. However, he indicated he was working on controlling external billable hours now that the branch had implemented a new time docketing reporting system and was conducting bi-annual case reviews with its external law firms.
In response to a follow-up question from Mayor O’Brien with respect to the time management system, Mr. O’Connor indicated he was striving for the capacity to provide pictorial data showing the various combinations of statistical information but that he was not yet able to do it.
Mayor O’Brien asked if staff had looked at the number of hours spent in comparison with other jurisdictions in terms of the size of the municipalities and he wondered where Ottawa stood with respect to the amount of legal work being done. Mr. O’Connor indicated he was not able to do this through the OMBI statistics but that he would be pleased to take it back to the Municipal Law Departments Association of Ontario (MLDAO) to work out the population and workload statistics with them. He hoped to be able to report back on this when the City presented its OMBI statistics, in late spring or early summer.
Councillor Jellett wondered if the City had the right balance between internal versus external legal resources. Mr. O’Connor explained that with 2007 as a base line, staff would work through those statistics and he would be able to report on this issue going into the next budget process, in the fall of 2008. He indicated, should he be able to identify an area where it would be more cost effective to transfer funding from external resources in order to hire another lawyer, he would come forward to Committee with that recommendation.
Responding to a question from Councillor Jellett with respect to the Legal Services Branch’s success rate in defending cases where Council disagreed with staff advice, Mr. O’Connor could not provide data with respect to the number of such cases and the costs associated with them in 2007. However, he indicated he would come back to Committee with these statistics. Following up on this issue, he referenced items where Standing Committees made recommendations to Council that were contrary to staff’s advice and advised he would be recommending that, when such reports went forward from Standing Committees to Council, members would receive a confidential legal opinion stating how much it would cost if Council supported the Standing Committee recommendation and what the City’s chances were in successfully defending challenges to such decisions. Furthermore, he suggested that on larger Council initiatives, the report format should include a section for legal or risk management implications. He felt Council needed this type of information when going ahead; either on decisions that were contrary to staff advice or on major initiatives.
In response to questions from Councillor Wilkinson, Mr. O’Connor indicated the legal costs associated with the Light Rail Transit (LRT) resided in the remainder of the LRT office, in the Planning, Transit and the Environment department’s budget. He confirmed that, with the exception of the LRT legal costs, all legal costs were reflected in his branch’s budget because, pursuant to the Delegation of Authority By-law and the Procurement By-law, he was the only officer of the corporation able to hire external legal counsel.
Councillor Wilkinson wondered why last year’s Legal Services budget was overspent by $1M and what assurances Council had that this would not happen again in 2008. She also wanted to know the legal costs association with the LRT, even though these resided in a different budget. Finally, she referenced the reduction option outlined at page 5 of the agenda for $80,000 and 1.6 FTE and inquired about the impact this would have.
Mr. O’Connor advised last year’s budget was overspent solely because of external legal costs. He indicated the $80,000 reduction outlined at page 5 of the agenda would eliminate one of the branch’s junior claims investigators, which would cause a modest delay in services to people who file claims with the City. With regard to legal costs associated with the LRT, Mr. O’Connor provided a break-down for 2006, which he noted had been reported to Council on September 12, 2007, and he advised that for 2007, the total was approximately $450,000, almost entirely related to litigation.
Responding to questions from Councillor Desroches, Mr. O’Connor confirmed external legal support was competitively sourced and that, whenever possible and/or appropriate, the branch used mediation and/or arbitration to resolve matters as opposed to going through the court process.
Councillor Desroches referenced some work being done with respect to legal clarification on Provincial statutes and he wondered why the onus would be on the City of Ottawa to come up with an interpretation of Provincial legislation. Mr. O’Connor discussed enabling legislation under the Municipal Act and Bill 130 as well as 200 pages of revisions and he submitted that legal opinions were required by municipalities in order to go forward.
In reply to a final question from Councillor Desroches, Mr. O’Connor discussed the importance of involving the Legal Services branch earlier rather than later on some matters and he submitted there was some room to improve in this area.
Mayor O’Brien referenced an earlier request from Councillor Wilkinson for more detail regarding the number of cases handled by the Legal Services branch last year and he expressed a desire to have this information during the current discussion and debate.
Responding to a question from Councillor Brooks, Mr. O’Connor explained that until January 1 of this year, claims investigators were not on a time docketing system. Therefore, he indicated he was not yet able to quantify the delay that may result from the $80,000 reduction outlined at page 5 of the agenda.
Councillor El-Chantiry referenced Mr. O’Connor’s earlier comments with
respect to implementing advice to Council relative to potential litigation and
association costs. He also commented on
the costs associated with responded to inquiries from members of Council and
options for dealing with this issue. In
response to the Councillor’s comments, Mr. O’Connor indicated he hoped to
implement the first issue (advice to Council relative to potential litigation
and association costs) as early as March and that, in the mid-term governance
review, staff intended to bring forward options with respect to dealing with
inquiries from members of Council.
Responding to a further comment from Councillor El-Chantiry, Mayor O’Brien indicated he also believed there were significant resources associated with responding to inquiries from members of Council. However, he felt the issue would be more appropriately addressed at the Corporate Services and Economic Development Committee (CSEDC) in terms of some immediate remedial action.
Mayor O’Brien asked Mr. Plamondon his view with respect to the target savings of $30,000 on Mr. O’Connor’s $6.2M budget in terms of whether he felt it was reasonable. Speaking to the question of whether or not the target was fair and reasonable, Mr. Plamondon indicated this was not an issue in which he was involved. Efficiency targets were allocated by the City Manager and he believed Mr. Kirkpatrick would be speaking to it. With respect to Council inquiries, he advised the review panel’s observation was that it was an impossible situation for staff to try to police requests from Council and therefore the protocol should be developed by Council, based on establishing budgets, accountabilities and/or thresholds.
Following up on the discussion, Mr. O’Connor indicated that from his branch’s point of view, about 6% to 7% of the budget was not spent on either compensation or external law firms. This amounted to approximately $400,000 from which he would have to find the $30,000 requirement. Therefore, he maintained this was a substantive hit and would have to come from such items as office equipment, supplies and staff training.
In response to an earlier question with respect to Council-driven legal costs, Mr. O’Connor advised he would like to provide a more substantive list for Committee. However, he gave members an overview of items and their associated costs: School of Dance, $250,000; constitutional challenge to the City’s Bilingualism Policy; $240,000; constitutional challenge to the City’s Adult Entertainment Parlour By-law, $300,000; contractual and commercial legal advice on the source-separated organics project, $170,000; Ottawa Lynx litigation; $160,000. Adding to that, he referenced $95,000 spent in 2007 for employee and Council indemnification. He explained the 2001 policy relative to this item and indicated it was an unfunded liability. He believed this policy could be looked at and identified as a possible saving in the future.
Mr. Kirkpatrick felt there were two issues; the amount of legal work being pursued and the need to provide better information so that elected officials might understand the implications and costs of some of Council’s decisions; and the level of comfort with the efficiency and productivity target assigned in the base budget. With respect to the productivity target, he explained that on a gross expenditure basis, the Legal Services branch budget was up 1.6%. He noted that a large portion of the branch’s budget related to compensation, and he advised the $30,000 efficiency target would reduce this increase to 1.2%. From an efficiency perspective, he felt this branch was doing a very good job. However, he went back to the issue of the amount of legal work being pursued and submitted Committee and Council had the opportunity to change what the branch was doing.
At this juncture, Councillor Wilkinson introduced a motion to accept Option 1, as outlined at page 5 of the agenda.
Mayor O’Brien wondered if it was premature to move forward with Option 1. Councillor Wilkinson maintained the point of these meetings was to find administrative savings and, in the budget book, staff had identified this as a possible saving. She submitted that, should it come to fruition, reducing the amount of legal work generated by Council would be an additional saving.
Responding to a question from Councillor El-Chantiry, Mr. O’Connor expressed agreement with Councillor Wilkinson’s motion, noting that as he moved forward with a branch re-alignment, he would be able to achieve the $80,000 reduction in-house so it would be more of an efficiency.
Moved by Councillor M. Wilkinson
That
the Legal Services budget be reduced by $80,000 (1.6 FTEs) as per the Budget
Reduction Option – Risk Management.
CARRIED
Committee then approved the Legal Services Branch budget as amended.
That
the Long Range Financial Plan Sub-Committee recommend Council approve the final
2008 Operational Budget of the Legal Services Branch, as amended by the
following:
1. That the Legal Services Budget be reduced by $80,000 (1.6 FTEs) as per the Budget Reduction Option – Risk Management.
CARRIED
as amended
Mayor O’Brien did not want this to take away from the bigger picture Council still had to deal with in terms of controlling Council-initiated legal activities because he felt there was a substantial potential for savings in this area.
A brief discussion ensued with respect to Council-driven legal activities and staff resources dedicated to responding to inquiries from members of Council. Mayor O’Brien asked that staff bring forward a proposal to address these issues before the end of March.