City paid $850K for empty rooms

[Mr Man]

City paid $850K for empty rooms
Units rented to house homeless families
But often went vacant, while shelters were full

KERRY GILLESPIE
CITY HALL BUREAU CHIEF

Over three years, the City of Toronto spent more than $853,000 on hotel rooms that sat empty because there weren't enough homeless families to fill them.

During those same years, 2001-03, many shelters were packed to the point of flouting United Nation's standards for refugee camps.

"It is inexcusable to waste close to $1 million, especially during a period when there was severe overcrowding in Toronto shelters," Olivia Chow, chair of the community services committee, said in response to findings by the city's auditor general, Jeffrey Griffiths.

Griffiths found the questionable spending during a review of hostel operations. His report goes to the audit committee next Tuesday.

Between 2001 and 2003, the report found, Toronto entered into a "bad contract" when it reserved a block of 54 rooms in a motel outside St. Catharines to house homeless families.

As part of the deal, it agreed to pay $40 a night for any rooms left empty. In 2001, that cost the city $56,000. In 2002, the figure jumped to $415,000; in 2003 it was $382,000.

The report doesn't specify which hotel was involved, but a source told the Star it was the Days Inn Prudhommes Landing, off the QEW near Vineland.

The city began contracts with out-of-town motels after Scarborough residents complained that local schools couldn't handle all the children from the Kingston Rd. motels that were being used as family shelters.

The city no longer pays to hold motel beds, nor does it have any contracts with motels outside the city, Griffiths' report notes.

So this won't happen again?

"You can guarantee that," Griffiths said.

During the years of empty paid-for motel beds, the homelessness crisis was front-page news. Each winter, advocates fought to get armouries opened for the homeless, and in church basements people slept on mats.

"I just imagine all homeless people that could have benefited from having decent shelter," Chow (Ward 20, Trinity-Spadina) said of the unused beds.

`Empty beds, not being used — that sounds really inefficient, but there's a certain amount of downtime. ... I don't see that it is much different than a TTC bus that has come along ... with eight passengers in it, and saying, "Well, most of your seats are empty — why don't you stop running this bus?"'

John Jagt, former director

of city shelter system

It's not that simple, said John Jagt, who was director of the city's shelter system for 22 years until he retired last year. He said the city wouldn't put a drug-addicted homeless man who needs counselling on his own in a St. Catharines motel room.

The city generally houses homeless men, women, youth and couples in shelters that are specific to each group and near the services and help they need.

The city has some family homeless shelters, but many families are housed in rented motel rooms. A family of four can stay in a motel for about $50 a night. A city shelter would cost almost twice that, Jagt said.

Out-of-town hotels in places like Burlington and St. Catharines were primarily used for refugee claimants who had no particular ties to Toronto and often needed to stay in shelters for several months, Jagt said.

After the Sept. 11, 2001, terrorist attacks in the United States, the number of refugees getting into Canada dropped, and so did family numbers in shelters.

But the way the system worked, if there were any families in the St. Catharines motel — and there were, during all three years in the report — it was because the family shelters were already full, Jagt said.

Building a 50-bed family shelter to replace the motel would cost $2 million or more, he said.

"Empty beds, not being used — that sounds really inefficient, but there's a certain amount of downtime," Jagt said.

"I don't see that it is much different than a TTC bus that has come along Lawrence at 11 p.m. with eight passengers in it, and saying, `Well, most of your seats are empty — why don't you stop running this bus?'"

At one point the city had deals with five out-of-town hotels, but the one mentioned in the auditor's report is the only case with a contract stipulation that the city would pay for empty rooms.

"It was a business decision," said Jagt, who stands by the deal made then.

The number of homeless families tends to spike in summer, and that's the time that the St. Catharines motel could fill its rooms at a higher rate without help from the city.

"We were under direction by council to phase back (motels on) Kingston Rd., so we had to protect out-of-town space, and that block of rooms was only available to us on that basis," Jagt said, explaining why the city agreed to the terms of the deal.

"He gave us first-class service," Jagt said of the hotel operator. "It was a good deal all the way around."

[Mr Man]

Since property taxes will keep rising every year do to fiscal mismanagement, maybe taxpayers will eventually start holding politicians responsible for wasting their money. Nahh... unlikly.

[Mr Man]

Ugly tidbits from auditor's report

ROYSON JAMES

The bad news just keeps piling up for the City of Toronto. Just when the province and federal government are thinking about treating the city as a grown-up, mature municipality, evidence mounts that it has not quite figured out how to manage the money it has.

Those agog over the fact Toronto overestimated the need for homeless shelter rooms and spent $853,000 to house homeless families in a St. Catharines hotel, only to see them not show up, have more fuel for their fire today.

The same auditor report reveals that $270,000 was wasted on similar accommodations in Toronto, thanks to duplicate bookings by homeless here.

As well, the city is likely missing out on close to a million dollars in provincial subsidies because it is failing to claim for household and personal items it supplies to the homeless.

In several other reports on the same audit committee agenda, before councillors next week, auditor general Jeff Griffiths reports:

A $44 million financial and information system, sold as one that would combine the payroll, financial and employment needs of all city departments, agencies, boards and commissions, is more costly than anticipated. And it is not being embraced by the boards and commissions.

Staff didn't tell council of "significant costs" to transfer various boards and agencies like TTC, police, library board, zoo, Toronto Hydro and others to the system. The zoo wants to go its own way, saying its system is cheaper.

And the TTC is warning of a $25 million cost to replace its current system.

"All technology acquisitions throughout the city (should be) effectively planned and co-ordinated," Griffiths says.

Soccer groups, swim clubs, baseball teams and parks and recreation users owe the city $2.8 million in unpaid fees. This is actually good news. Staff have cut the amount owed in half, through more aggressive collection. Still, the auditor says at least $1.3 million should be written off as uncollectible. Six months ago he estimated the amount at $1 million.

As of last August, city staff past and present had not repaid approximately $630,000 in salary overpayments discovered by payroll staff. Understand, this is the amount discovered. About half the amount won't be recovered, the auditor says.

How does it happen? Sometimes, cheques are issued before Workplace Safety and Insurance Board claims are processed. When the claim is rejected, the city has to try to recover the money. As well, many overpayments are made to part-time recreation and parks workers. Supervisors often sign time sheets based on a worker's anticipated schedule, not actual hours worked. Some of these workers are long gone before the mistake is caught.

Conclusion: "No process in place to evaluate or monitor internal controls over payroll processing in city departments," Griffiths' report says.

The overpayment refers to city departments only. It does not include the thousands of workers at the Ex, police department and TTC, for example. The auditor also reports that these groups are generally slow to respond to audit directives, calling their compliance "inconsistent and in some cases non-existent."

Griffiths is to launch an audit of how and why cost for a police data collection and management system doubled to $17 million and the system still isn't ready. Police promised the system would reduce staff by 150 and save $5.27 million, commencing in 2000. Several revisions later, completion will be late this year and with less than half the staff reductions.

In each case, staff can point to extenuating circumstances, mistakes that have been corrected, improvements over previous indiscretions.

For example, says CAO Shirley Hoy, the hostel department made as good an estimate as it could. It signed the agreement in an environment where not many hotel owners wanted to house the homeless clients. Empty beds could not routinely be transferred to other homeless clients, like single men who are the most visible ones downtown. And city staff have been so busy solving the problem they may not have paid enough attention to process.

Regarding salary overpayments: No overpayment is acceptable, but when a city's payroll is $2.4 billion a year, overpayment of $630,000 over a six-year period is not that bad.

But cumulatively, the reports paint an ugly picture.

All this comes in the wake of the MFP inquiry where the former budget chief and city treasurer have had their credibility shredded by inquiry lawyers seeking to figure out how the city's finances are run. And it arrives in time for budget discussions, where city staff will soon tell councillors they are hundreds of millions of dollars short of balancing the budget.

And it must be weighed against requests from city departments for more money for all kinds of high-priority services like transit, housing, police, garbage, fire and ambulance.

For example, Toronto police want more than 500 Taser stun guns at a cost of $1.1 million. How does council say no to this, when a million is spent on empty beds for the homeless?

One irony. Griffiths, who is constantly after the city to save money, wants another $200,000 so he can hire more people to save more money.

In some years, the budget committee has been known to give the audit budget a good going over. If council says no to the current request, then we know city hall has no hope of redemption. If they can spend $1 million on empty beds for the homeless, surely they can find $200,000 for the auditor who keeps blowing the whistle on spending excesses.