Nov 11

Layoffs, Lies & Statistics: Does the City of Toronto employ too many people?

There will be blood. And also layoffs.

That’s the word from City Manager Joe Pennachetti, who has to be loving his life these days, and from the mayor and his assorted hangers-on. The strategy seems to be to pretend that layoffs were always on the table — of course they were! –, even though Rob Ford himself promised there was “no need for layoffs” during his campaign.

The National Post’s Natalie Alcoba covers the story:

Pink slips are on the way for city employees, the municipality’s top bureaucrat warned on Thursday, as officials feverishly put numbers together to see what it takes to balance the budget next year.

“There will be layoffs and that’s been known for a long time,” city manager Joe Pennachetti told reporters as the budget committee deliberated on garbage and water rates.

Budget Chief Mike Del Grande would not say whether he is expecting layoffs to be part of the financial mix.

“We’re feverishly putting numbers together to see what it takes to balance the budget,” he said. He pointed out that the city’s labour force has ballooned since amalgamation, when the whole idea was to reduce employees and be more efficient.

via ‘There will be layoffs,’ city manager warns | National Post. (Emphasis added.)

That last bit is a familiar refrain at this point. And it’s the sort of thing that people assume is true, even without evidence. Of course our big government socialist bureaucracy would never get any smaller, what with all the chipmunk suits and confusing public art they keep spending our tax money on.

But, hold on, once we get past the rhetoric and the ideology, we’re still left with the fundamental question: is it true? Did the number of city staff only increase after amalgamation?

Looking to the numbers

Between 1998 and 2007 — the last year I could find numbers for — the following City departments actually saw a net reduction in staff:

  • Clerk’s Office (-97 positions)
  • HR (-73)
  • Finance (-69)
  • Mayor & Council Offices (-51)
  • Facilities (-42)
  • Fleet (-30)
  • Public Info & Creative Services (-28)
  • Auditor General’s Office (-24)
  • City Manager (-13)
  • Something called CS-SII (-9)
  • Legal (-4)
  • Toronto Water (-432)
  • Public Library (-194)
  • Transportation (-122)
  • Housing (-107)
  • Public Works (-53)
  • Solid Waste (-49)
  • Business Support (-41)
  • Policy, Finance & Admin (-14)
  • Economic Development/Culture/Tourism(-11)
  • Parking Authority (-6)
  • Fire (-7)

On the other hand, here’s where the city added employees:

  • IT (+44 Positions)
  • Planning (+5)
  • Waterfront/Clean & Beautiful City (+8)
  • Other/ABCs (+15)
  • Zoo (+20)
  • Municipal Licensing & Standards (+21)
  • Building (+30)
  • 311 (+33)
  • Parking Enforcement (+54)
  • Works – Technical Services (+83)
  • Exhibition Place (+164)
  • Parks, Forest & Recreation (+186)
  • Court Services (+251)
  • EMS (+340)
  • Police (+875)
  • Social Development (+30)
  • Homes for Aged (+111)
  • Child Services (+114)
  • Social Services (+195)
  • Shelter & Housing (+353)
  • Public Health (+704)
  • TTC (+1,927)

Whew. So what do we learn from all that? This chart from the City’s 2008 Operating Budget Presentation sums things up pretty well:
City of Toronto Net Change in New Positions - 1998 - 2007(There’s also this more detailed chart if you’re so inclined.)

Post-amalgamation, the city actually shed staff positions in the places where you’d think they would. The number of people doing administrative duties decreased as departments were combined and services shared. Basic municipal services — things like economic development, solid waste, etc — saw either similar reductions or limited growth, with a few exceptions.

Where there was growth, it was either because of the times we live in (increases to the number of IT staff, for example) or because council decided to put emphasis on specific departments or services  in order to grow or improve the city. If a mayor decides that he or she wants to improve the cleanliness of the city, as David Miller did with his Clean & Beautiful City initiative, you probably need to put some staff on it.

Some of the biggest increases in places where the city has limited ability to control costs. Social Development, Homes for Aged, Child Services, Social Services, Shelter & Housing and Public Health are all cost-shared services with the provincial government. Like we saw earlier this year with the vanishing-and-reappearing public health nurses, often the province will provide fully funded positions to municipalities. They also mandate minimum service levels, tying the city’s hands. (To be fair, they also transfer money to the city to cover — or partially cover — the delivery of these programs.)

The big spikes, of course, came from the Police (and EMS) and the TTC. As Rob Ford just learned, the police budget is challenging to rein in. To say the least.

The TTC growth is even easier to explain. Over the last seven years, TTC service was expanded far beyond the dismal levels of the mid 90s. And people noticed, as ridership has increased to record highs. But with transit, the staffing equation is simple: if you add a bus, you add a driver. And with more drivers comes more supervisors, more mechanics and more support staff.

So-called ‘efficiencies’ will only get you so far with transit, unless you start putting Total Recall-esque Johnny Cabs in the driver’s seat of city buses and streetcars. The only way to significantly cut staff here is to cut service.

Layoffs almost always mean service cuts

With a well-executed plan for continuous improvement, any corporation — including the City of Toronto — can start doing more with less. Toronto has, in fact, been doing this for years. Each of the city’s last six approved budgets included significant savings from efficiencies. With continuous improvement and employee attrition, you’re able to successfully shrink the size of government without layoffs and buy-outs.

But Rob Ford’s government has blown away any notion of continuous improvement, instead opting to look at the budget — and the city’s workforce — with a hatchet in hand. A look at where the city has seen staffing growth over the last decade makes it clear: any layoffs will almost certainly mean a roll-back in services.

Sep 11

What the city manager saved from the budget knife

After the marathon Executive Committee meeting in July, councillors opted to punt on their next play. They left everything on the table — all of the hundreds of considerations identified in the KPMG report — and asked City Manager Joseph Pennachetti to report back on their feasibility in regards to the budget process.

And so he did, on Monday with the release of his ‘final report.‘ But the city manager’s report feels hardly worthy of such a declarative title, as it again seems to call for a punt, kicking the brunt of the KPMG considerations back to various agencies, boards and committees for further discussion and debate.

Pennachetti did, however, take some items off the table as potential cuts for consideration in the upcoming budget process. Below is a comprehensive list of what is, at least for now, safe:

  • The Toronto Office of Partnerships: Because closing or reducing this office “could lead to lower revenue generation for sponsorships, reduced opportunities for P3s.”
  • The Toxic Taxi: This service, which allows residents to schedule pick-ups for hazardous waste and other goop, will continue. Pennachetti points out that a cut here would leave residents without access to vehicles with no real way to dispose of household hazardous waste, and that it would result in reduced matching funds from Stewardship Ontario.
  • Small Commercial Waste Collection: Ruled out due to logistic challenges related to determining whether curbside waste was generated by a residential or commercial source.
  • School Crossing Guard Program: Among other reasons, it’s said that this cut would “present for the City potential public safety issues, leading to complaints.” People do tend to complain when children are injured by speeding vehicles.
  • Water Fluoridation: In a move sure to rile up a bunch of people who love conspiracy theories, Pennachetti says that fluoridation is a continued necessity to ensure a docile population and reduce the risk of a mass rebellion. Just kidding. He says it helps improve dental health.
  • Development of bicycle infrastructure: Thankfully, the city manager says that ceasing development of cycling infrastructure would “reduce the incentives/encouragement to cycle, increasing travel by other modes.” He also notes that “cycling is an environmentally sustainable mode of transportation.” Which seems obvious, but is probably worth repeating a bunch of times.
  • Emergency Animal Rescue & Care: KPMG said to look at increasing response times for animal rescue, but friend-of-the-forest Pennachetti basically says that will cause more animals to die.

Pennachetti also rules out considerations that we try to establish a partnership with the federal government, making the Toronto Zoo a “National Zoo” associated with Rogue Park. He also nixes an idea for an independent, not-for-profit agency to take control of the zoo, preferring an outright sale to private owners.

Everything else remains on the table as we go forward, which continues to make for a frustrating debate. The Mayor of Toronto does not have the luxury of passing the buck on these kinds of issues. Citizens — or taxpayers; whatever –are entitled to a clear indication of what potentially will and will not be cut in next year’s budget. Only then can we have a full and honest debate about the city’s finances.

Sep 11

2012 Budget: Trading tax cuts for service cuts in Rob Ford’s Toronto

After months packed with a weak, barely-heard consultation process and a maddeningly non-specific communication strategy employed by the mayor’s executive committee — who told us that nothing, specifically, was on the table for cuts, except everything —, today we finally received, by way of the city manager, a list of concrete recommendations for service cuts in the 2012 budget.

They amount to, at best, $300 million worth of cuts over the next three operating budgets. For 2012, the best case scenario sees $100 million worth of cuts, mostly coming in areas like transit, planning & heritage, parks & recreation, street cleaning & snow removal, policing and libraries. We could see further cuts to both policing and libraries (including branch closures) in 2013 and 2014.

That $100 million in cuts does very little to fix the city’s perennial structural budget gap. It actually only barely covers the damage done in last year’s budget, when Council voted to significantly reduce revenues by cutting the vehicle registration tax and freezing property taxes. In essence, this fills the hole Rob Ford created and leaves us staring, rather fruitlessly, at the remaining shortfall — the same one that has dogged us since amalgamation.

Ford and his executive committee will attempt to make up the remaining difference — they’d peg it at $664 million, but really it’ll be closer to $350 million — through the forthcoming user fee review (which will undoubtedly recommend that user fees go up sharply) and the so-called efficiency study, which might end up being yet another set of veiled cuts to services. There will also be the inevitable TTC fare increase and a perfunctory property tax increase, though Ford has said he’d like to keep any increase on the low side. (To make up for last year’s freeze, we should probably be looking at something in the neighbourhood of at least four percent, but Ford has floated numbers in the two percent range.)

If it wasn’t clear already, this morning’s announcement should kill any lingering doubt that Ford has, rather spectacularly, violated his campaign promise not to cut city services. Ford voters now must look square in the face at a fiscal reality that says that damn near every dollar of revenue — taxes — removed from the city’s coffers must be complemented with an equivalent cut to service. Most of the 2012 savings come from proposed TTC cuts, including to Blue Night service, which would have a devastating effect on low-income people across the city, particularly in suburban neighbourhoods. Many of the remaining cuts are nickel-and-dime stuff, and little analysis seems to have been done to measure the financial impacts cuts to services can have to other departments or agencies.

City Manager Joseph Joseph Pennachetti has also passed the buck on a number of items, ensuring that we’re still several months away from a real debate about what to cut. Pennachetti recommends sending nearly all of the KPMG budget considerations back to various boards, committees and agencies, where they can be further debated, deputed on, and probably once again referred to executive committee. It’s an endless cycle, which cries out for the kind of fiscal leadership from the mayor’s office we were promised on election night. Rob Ford has sat in council chambers for over a decade’s worth of city budgets: it’s time we heard his ideas for plugging the budget gap. No more hiding behind expensive consultants and endless process.

Deputants to committees, left-leaning councillors and progressives in the city have been called out several times by those in power for merely championing existing programs, instead of proposing solutions to the city’s budget shortfall. What became clear today was that those running the city — Rob Ford, Budget Chief Mike Del Grande, assorted council hangers-on and staff — have no real idea how to balance the budget either. Their last, best hope is to skate through 2012 with assorted surplus revenues, these cuts, and user fee hikes, and then begin a fire sale of city assets — including, as we learned last week, the Port Lands — in the inane hope that using those revenues to pay down capital debt gives them enough room in the operating budget to make things balance.

It’s a bad idea that could significantly damage our city, and it continues to ignore Toronto’s only real path to fiscal sustainability: a coordinated approach to intergovernmental relationships, new sources of revenue — which must include consideration of road tolls and a sales tax — and a massive push for the provincial government to take back the funding responsibilities that rightfully belong to them.