Item - 2018.AU13.10

The Audit Committee recommends that:

1. City Council request the General Manager, Parks, Forestry and Recreation Division, to ensure that the new Urban Forestry information system consists of all key permit issuance functions to enable adequate system controls over permit issuance and the collection of fees, payments, and deposits.

2. City Council request the General Manager, Parks, Forestry and Recreation Division, to develop and implement effective management measures for permit issuance including secondary review of permit files by supervisory staff and adequate staff training.

3. City Council request the General Manager, Parks, Forestry and Recreation Division, to develop and implement effective and efficient procedural requirements to verify compliance with tree replanting and tree protection permit requirements.

4. City Council request the General Manager, Parks, Forestry and Recreation Division, to ensure that the approval for tree permit exceptions are supported with valid reasons and consistently applied across all district offices. Steps to be taken include:

a. Clear requirements for staff to provide sufficient documentation on file detailing the tree condition assessment results, and what constitutes the imminent hazard.

b. Adequate training to staff.

c. Regular supervisory review to ensure trees approved for exception meet the by-law and Division's criteria.

5. City Council request the General Manager, Parks, Forestry and Recreation Division, to provide sufficient staff training and implement adequate oversight measures to ensure tree condition assessment and location rating are determined in a consistent manner across the City, and are sufficiently documented to support the determination of an appraised tree value.

6. City Council request the General Manager, Parks, Forestry and Recreation Division, to develop a clear policy and process to address old unclaimed Tree Security and Tree Protection Guarantee deposits. The policy should specify when an outstanding deposit should be classified as aged or forfeited, and the appropriate follow-up steps to verify the status of the deposits. Where all reasonable efforts to locate the applicants have been exhausted, the unclaimed deposits should be transferred to the City's revenue account.

7. City Council request the General Manager, Parks, Forestry and Recreation Division, to put in place an effective management review process to ensure adequate and appropriate actions are undertaken by staff to respond to applicants' requests for refund of Tree Security and Tree Protection Guarantee deposits.

8. City Council request the General Manager, Parks, Forestry and Recreation Division, in consultation with the City Solicitor, to review and where appropriate amend the provisions in the tree by-laws, to ensure effective enforcement and fee and payment requirements for contraventions of the by-law requirements.

9. City Council request the General Manager, Parks, Forestry and Recreation Division, to review and improve the current complaint handling and investigation process by:

a. putting in place a regular supervisory review and training process to ensure contravention related complaints are properly investigated and orders are issued as needed.

b. implementing ongoing monitoring measures through periodic reviews of exception reports on duplicated records, investigation status, and follow-up actions by staff to ensure compliance with orders issued.

c. ensuring the new Work Management System has controls in place to minimize and prevent data entry errors and the ability to run exception reports to identify anomalies for follow-up. Staff should be provided with adequate training and procedure in recording information in the new system.

10. City Council request the General Manager, Parks, Forestry and Recreation Division, to review and improve the tracking and processing of outstanding contravention inspection fees and remedial costs incurred by the City to ensure complete and efficient collection of all unpaid fees in accordance with the tree by-laws.

11. City Council request the General Manager, Parks Forestry and Recreation Division, to ensure adequate inventory management processes and controls are implemented at the City's tree nursery, including providing staff an adequate inventory management system and training, supervisory review and approval of physical count results and adjustment to inventory records, and regular reconciliation between purchase and planting document.

12. City Council request the General Manager, Parks Forestry and Recreation Division, to conduct a cost benefits analysis of the residential tree planting model, including an assessment of warranties, survival rates and the cost of operating the City's nursery.

Jane Ying, Assistant Auditor General, gave a presentation to the Audit Committee on this Item.

The Auditor General's 2017 Audit Work Plan included an audit of the Urban Forestry Branch within the Parks, Forestry and Recreation Division. This report focuses on Urban Forestry's permit issuance and tree bylaw enforcement functions.

To remove or undertake construction work near a City tree or a private tree (with a diameter of 30 cm or more) in the City, a person must obtain either a Tree Removal Permit or a Tree Injury Permit from Urban Forestry. In addition to permit application fees, Urban Forestry collects three different types of payments and deposits:

- Cash-in-lieu of planting when applicants have no space to plant replacement trees

- Appraised tree value as determined by staff for a permit to remove a City tree

- Refundable deposits: a Tree Planting Security Deposit to ensure the planted trees are in good condition, and a Tree Protection Guarantee to ensure compliance with tree protection measures.
 

Overall we found weak controls and insufficient management oversight over permit issuance and collection of payments and deposits. We noted instances of missed calculations and collection of permit payments and deposits in our sample review. There is also a lack of inspection and other efforts by staff to verify compliance with permit requirements.

As of February 2018, Urban Forestry had a balance of $29.3 million in refundable deposits, collected between 1994 and 2017. Approximately $19.5 million in deposits was collected prior to 2016. Urban Forestry has no specific policy or process to identify and follow-up on old unclaimed deposits. In our sample review, we noted instances of deposits not refunded to applicants due to a lack of action by staff.

Applicants who apply for a tree removal or injury permit are required to pay certain fees, but individuals who illegally remove or injure trees are not required to pay these fees. It appears that the current tree bylaws do not provide authority for staff to require people to pay the appraised tree value and the Tree Protection Guarantee for violating the bylaws, even though these payments are part of the permit conditions for people who apply for a permit. In our view, the current bylaw provisions are not conducive to compliance with permit requirements and protection of trees in the City.