3. vehicle ownership transfer from city of ottawa to ottawa community housing corporation

TRANSFERT DE LA PROPRIÉTÉ DE VÉHICULES DE LA VILLE D’OTTAWA À LA SOCIÉTÉ DE LOGEMENT COMMUNAUTAIRE D’OTTAWA

Committee RecommendationS

That Council:

1. Approve the proposed vehicle ownership transfer from the City of Ottawa to Ottawa Community Housing Corporation; and,

2. Approve that all depreciation contributions, which were originally made by the Ottawa Community Housing Corporation and valued at $330,000, be transferred from the Corporate Fleet Vehicle and Equipment Replacement Reserve to the Ottawa Community Housing Corporation.

Recommandations DU Comité

Que le Conseil :

1. Prenne connaissance du projet de transfert de la propriété de véhicules de la Ville d’Ottawa à la Société de logement communautaire d’Ottawa;

2. Approuve le transfer de toutes les contributions d’amortissement, qui avaient été faites à l’origine par la Société de logement communautaire d’Ottawa et dont la valeur s’élevait à 330 000 $, du Fonds de réserve destiné au remplacement de l’équipement et du parc automobile de la Ville à la Société de logement communautaire d’Ottawa.

Documentation

1. Deputy City Manager’s report dated 19 August 2010 (ACS2010-COS-PWS-0013).

Report to/Rapport au :

Transportation Committee

Comité des transports

and Council / et au Conseil

19 August 2010 / 19 août 2010

Submitted by/Soumis par :

Steve Kanellakos, Deputy City Manager/Directeur municipal adjoint

City Operations/Opérations municipales

Contact/Personne resource:

John Manconi, General Manager/directeur générale, Public Works/ Travaux publics

613-580-2424, extension 2110, John.Manconi@ottawa.ca

City Wide/à l’échelle de la ville

Ref N°: ACS2010-COS-PWS-0013

SUBJECT: VEHICLE OWNERSHIP TRANSFER FROM CITY OF OTTAWA TO OTTAWA COMMUNITY HOUSING CORPORATION

OBJET: TRANSFERT DE LA PROPRIÉTÉ DE VÉHICULES DE LA VILLE D’OTTAWA À LA SOCIÉTÉ DE LOGEMENT COMMUNAUTAIRE D’OTTAWA

REPORT RECOMMENDATIONS

That the Transportation Committee recommend Council:

1. Approve the proposed vehicle ownership transfer from the City of Ottawa to Ottawa Community Housing Corporation; and,

RECOMMENDATIONS DU RAPPORT

Que le Comité des transports recommande au Conseil :

1. De prendre connaissance du projet de transfert de la propriété de véhicules de la Ville d’Ottawa à la Société de logement communautaire d’Ottawa;

2. D’approuver le transfert de toutes les contributions d’amortissement, qui avaient été faites à l’origine par la Société de logement communautaire d’Ottawa et dont la valeur s’élevait à 330 000 $, du Fonds de réserve destiné au remplacement de l’équipement et du parc automobile de la Ville à la Société de logement communautaire d’Ottawa.

BACKGROUND

Fleet Services is responsible for the life cycle management of vehicles and equipment that support the City of Ottawa’s diverse operations. At amalgamation, Fleet Services acquired ownership of several legacy vehicles operated by the Ottawa Community Housing Corporation (OCHC). At that time, the agreement was to transfer vehicle ownership from Fleet Services to the OCHC when each unit became due for replacement. Until a unit was replaced, the OCHC paid the associated depreciation cost with the understanding that once fully depreciated the City (i.e. Fleet Services) would replace these legacy vehicles, and, at that point, transfer the ownership to the OCHC. Once the ownership transfer was completed, the OCHC would assume full responsibility for the life cycle management of these vehicles.

DISCUSSION

The purpose of this report is to recommend that a change in vehicle ownership be implemented in order to more accurately reflect the day-to-day use of the OCHC legacy vehicles. Legal has advised that since the OCHC is a separate and distinct entity from the City of Ottawa, vehicles now owned by the City of Ottawa for sole use by the OCHC should have the ownership transferred. Currently, these vehicles are insured under the City of Ottawa Integrated Risk Insurance Policy, which is the primary policy used to respond to all claims even though the City has no authority over the employees operating these vehicles. As a result, any losses arising from the use or operation of these vehicles would be paid for from the Insurance Fund up to the City’s $3 million deductible and could potentially adversely affect the City’s costs and ability to purchase insurance.

Given that the OCHC is solely responsible for its operations and should operate at an arm’s length from the City of Ottawa, transfer of these legacy vehicles will provide clear delineation of responsibilities and liabilities.

Representatives from the OCHC and Fleet Services met on July 16, 2010 to discuss this matter and both agree it would be mutually beneficial to transfer ownership. On August 12, 2010, the OCHC Finance and Audit Committee received the attached report and recommended the report be presented to the OCHC Board of Directors for their approval on August 26. It is further recommended that all related depreciation contributions, which were originally made by the OCHC to the City, currently valued at $330,000, be transferred to the OCHC as they are assuming responsibility for the vehicle replacement program of these units.

CONSULTATION/PUBLIC NOTIFICATION

Fleet Services has consulted with representatives from the OCHC regarding the transfer of ownership.

LEGAL/RISK MANAGEMENT IMPLICATIONS

There are no legal/risk management impediments to implementing any of the recommendations in this report.

CITY STRATEGIC PLAN

No implications for the City strategic plan.

TECHNICAL IMPLICATIONS

There are no technical implications to implementing any of the recommendations in this report.

FINANCIAL IMPLICATIONS

Funds transfer of $330,000 from the Municipal Fleet Vehicle and Equipment Replacement to Ottawa Community Housing Corporation. There is currently $4.83 M available in the reserve.

SUPPORTING DOCUMENTATION

Document 1 – OCHC Finance and Audit Report (August 12, 2010)

DISPOSITION

Upon approval of this report, the Public Works Department will proceed as per Council’s direction.

Document 1

OCHC Finance and Audit Report (August 12, 2010)

OTTAWA COMMUNITY HOUSING CORPORATION

REPORT TO FINANCE AND AUDIT COMMITEE

August 12, 2010

FOR APPROVAL

1. SUBJECT

Fleet Management

2. RECOMMENDATION

That the Committee recommend that the Board of Directors approve the proposed transfer of vehicle ownership from the City of Ottawa to Ottawa Community Housing Corporation.

That the Committee recommend that the Board of Directors request the transfer of approximately $330,000 from the City of Ottawa Vehicle and Equipment Capital Replacement Plan to the Ottawa Community Housing Corporation.

Jo-Anne Poirier Contact: David McCarron

Chief Executive Officer 613-520-2282

3. BACKGROUND

OCH currently operates a fleet of 74 vehicles. 9 vehicles are dedicated to Community Safety Services and 65 vehicles (including 4 landscape trailers) support the delivery of maintenance services in OCH communities.

While most of these vehicles are owned by OCH, 24 are leased through an agreement with the City of Ottawa. This arrangement has been in place since City Living operated as a department of the City and the vehicles are all at least eight years old and they have seen significant use. In recent years, Fleet Services has transferred the ownership of several new vehicles as they have become due for replacement, based on a plan to transfer ownership of the fleet on an incremental basis.

4. DISCUSSION

OCH is wholly responsible for the operations of the corporation and this lease arrangement is problematic because of liability issues. These issues have been identified by the insurance broker for OCH and confirmed by legal counsel at the City of Ottawa. In the case of an accident and claim, there is no way to separate the City’s liability from that of OCH.

The lease payments by OCH have included a depreciation contribution which has been held by the City in a vehicle replacement fund. The current balance of these contributions is estimated at $330,000. It is proposed that these funds be transferred to OCH.

A report that recommends this transfer of ownership and funds will be considered by the Transportation Committee of Council on August 23, 2010. The recommendations will rise to Council on September 8, 2010.

5. CONSULTATION

This liability issue has been reviewed by City of Ottawa Legal staff and with a senior vice-president at Aon Reed Stenhouse, the insurance broker for OCH. Both parties have strongly urged that this transfer of ownership take place. Discussions with Fleet Services staff at the City of Ottawa have been very constructive and collaborative.

6. FINANCIAL IMPACT

The transfer of vehicle ownership and the depreciation contributions represents a significant financial benefit for OCH. The $330,000 will be dedicated to the replacement of vehicles. Of potentially greater fiscal importance is the reduction of risk and liability that will result from the transfer.

Because of a continuing relationship with Fleet Services, OCH is able to purchase vehicles and maintenance services at favourable rates that have been negotiated by the City of Ottawa. Staff from Fleet Services have also offered to provide continued advice and support as OCH develops its own fleet management practices.

___________________________

Ven Giannantonio

Director of Finance