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link — Comments Off on First Core Service Review report: cut snow-clearing, street-sweeping, fluoridation and recycling programs
11
Jul 11

First Core Service Review report: cut snow-clearing, street-sweeping, fluoridation and recycling programs

Cast your mind back to when Rob Ford, then a candidate for mayor, ran on a platform of austerity and service cuts, highlighting a need for Toronto residents to sacrifice things like regular street cleaning, water fluoridation and snow-removal in order to maintain Toronto’s lowest-in-the-GTA property tax rates? Remember that?

You might not, because it never happened. Instead, Ford ran on a platform that called for an end to “gravy train” waste. He told voters he would be able to save them $230 million on the 2011 operating budget, and ultimately produce a $1.7 billion surplus over his first four years in office, all without cutting services. The city doesn’t have a revenue problem, he was fond of saying, but a spending problem. And he could fix that.

Today, the campaign-era theatrics and slogans all came crashing down, as the Rob Ford administration revealed the first phase of their Core Services Review report. The initial release relates to programs that fall under the purview of the Public Works & Infrastructure Committee. It concludes that a  full 96% of the services provided by these city departments are absolutely essential. Nearly all the potential avenues for savings are listed as “small.” They include things like cutting down on the frequency of street sweeping, changing our standards for snow-removal, setting less ambitious targets for recycling and green bin programs and discontinuing the practice of fluoridation for the city’s water supply.

Councillor Denzil Minnan-Wong, Chair of the Public Works & Infrastructure committee, seemed to agree with media reports that claimed very few — basically none — of the report’s areas for consideration are actually plausible cuts, telling the Toronto Star’s David Rider and Paul Moloney that PWIC was not “a sweet spot” for easy savings. Which is decent enough logic, but if that was so obviously the case, why lead the multi-stage announcement of the Core Service Review reports with this document? Why not come out swinging with a report that highlights real areas for savings?

It might be because there is no such a report. This PWIC document identifies only $10 to $15 million worth of savings, which means the remaining seven reports — relating to committees like Economic Development, Parks & Environment, and Executive — need to contain considerations that average out to approximately $100 million in savings each to even begin to approach this year’s budget shortfall of $775 million.

As Torontoist’s Hamutal Dotan points out, the most glaring failure of this report is that it doesn’t even address the fiscal efficiency of how services are delivered, but instead jumps right to listing things that could be cut:

Which is to say, the administration directed its consultants to look for which programs it was allowed to cut, and by how much, without ever asking it to look at how it could maintain service levels by delivering them more efficiently. The underlying message of today’s report: if we want to cut the size of the budget, it will be, in the first place and not as a last resort, by cutting the scope of government.

via Waste Diversion, Fluoridation, and Cycling Infrastructure in First Round of Potential City Hall Cuts | Torontoist.

In other words: they’re skipping the gravy, and going right to the meat.

link — Comments Off on Opposition to local food part of a race to the bottom
04
Jul 11

Opposition to local food part of a race to the bottom

From last week, the Toronto Star’s Paul Moloney:

The City of Toronto probably can’t afford to buy local food for its long-term care homes, shelters and daycare facilities, say some members of the government management committee.

Work on a buy-local policy began under former Mayor David Miller, but supporters of Mayor Rob Ford made it clear they don’t like it if it costs more.

“I think we should go out there and get the biggest bang for our buck,” said Councillor Doug Ford. “Yes, everyone wants to support Ontario-based food growers, but sometimes it’s just not realistic.”

via Toronto’s ‘buy local’ food policy under attack – thestar.com.

Later in the article, Councillor Paul Ainslie justifies the opinion by noting that he noticed quite a price difference between locally-produced and California-grown strawberries.

The city’s new strategy of going for the cheapest possible option above all else already burned them once, when the discount survey software they used for the Core Service Review frustrated a ton of people. This race to the bottom ignores that sometimes the city can make strategic investments that actually benefit the people in and around Toronto.

The buy-local policy, approved in an unrecorded vote by the previous council, set a target of 50% local food that was later found to be unworkable and unattainable. However, the consultant hired to look at the plan does lay out new targets, which would cap out at 25% local food purchasing, at cost of $125,000 per year to the city. You can read the report at the city’s website.

That cost is small potatoes given the city’s overall budget, and the economic benefits of buying local are bound to outweigh that figure. This doest feel like it should be a contentious issue. Instead, this opposition feels like the work of politicians who continue to believe that “public investment” is synonymous with “wasteful spending.”

A final decision will be made at this month’s council meeting.

link — Comments Off on City infrastructure: something’s gotta give
03
Jul 11

City infrastructure: something’s gotta give

The Toronto Star’s Paul Moloney reported last week that the city now carries $4.4B worth of net debt, as a result of a 20 per cent increase in 2010. Moloney talked to Deputy Mayor Doug Holday to get the scoop on how this administration is going to reduce debt levels:

“I guess we’ll have to look at capital requests with a fine-tooth comb,” Holyday said. “It’s things like the Fort York bridge, which was to be entirely borrowed — it went over budget and became unaffordable.”

“As we go forward, I wouldn’t be surprised if we found other projects that could wait or be reduced in some fashion. We’re just not in a position to keep increasing the debt load.”

via Toronto debt $4.4B and rising – thestar.com.

In other words: we’re going to cut things. Because previous councils have spent far too much on all the entirely unnecessary infrastructure we’ve seen spring up in recent years. Like, um… huh.

The reality is that a significant percentage of the city’s capital costs go to entirely necessary repairs to existing infrastructure. It’s never easy or cheap to run a major city, but it gets progressively harder and more expensive when all the stuff that helps the city function — the pipes, the roads, the tracks, the transit vehicles, the public housing — get to be at least 30-40 years old.

It’s worth noting that the last time a city agency got lax with prioritizing state of good repair costs in their capital budgets, people literally died.

Even ignoring the cost of maintaing the infrastructure we’ve got, no one could reasonably argue that a fast-growing city in a super-fast-growing region can or should make do with the infrastructure we have. As reported by the National Post’s Natalie Alcoba, the Toronto Board of Trade released a report last week calling for the expansion of transportation infrastructure to be a major issue in this fall’s provincial election:

Toronto-area residents are stuck in some of the worst traffic around, spending on average 80 minutes a day commuting, according to regional transit agency Metrolinx. That could hit 109 minutes by 2031. The congestion costs the Toronto-area economy $6-billion a year, a figure Metrolinx says will rise to $15-billion in 20 years if significant action isn’t taken.

“This is a critical issue, this is a top issue up there with the issues of health care, with the issues of education,” said [Board of Trade president Carol] Wilding. “At this point, taking options off the table, or a bidding war that goes down the path of what we don’t want to do, is not the right discussion to be having.”

via Funding to tackle ‘a critical issue’: Toronto Board of Trade | National Post.

The belief that solving the fiscal challenges facing the city is a simple matter of cutting a few wasteful things is, I think, one of the more dangerous elements of the Rob Ford administration. Serious, structural shortfalls — both fiscal and relating to infrastructure — require serious leadership, especially with regard to intergovernmental affairs.

Of course, Councillor Doug Ford stepped it after the Board of Trade report, fulfilling his role as Requisite Diversion and proposing some dumb magical private-sector thing where the Gardiner Expressway would be three storeys high and people would live in it. Problem solved.

 

link — Comments Off on The mayor who once mused about selling public housing to pay operating costs
13
Jun 11

The mayor who once mused about selling public housing to pay operating costs

So remember when Rob Ford told the media he thought it might be a good idea to sell some existing units of public housing and use the revenues to pay down this year’s budget gap? He was, apparently, just kidding around.

The Toronto Star Editorial Board has more on this:

Even if Ford could somehow find a way over these hurdles, selling almost 1,000 homes in various states of repair would likely take years. It wouldn’t be much help in dealing with the city’s shortfall now.

So we ask again, “Where’s the gravy?” Ford failed to find it in time for the 2011 budget, which was to drop by 2.5 per cent thanks to all the fat he would drain from the system. He ended up spending more to run the city, not less. Never mind, said Ford, 2012 will be different. If so there’s no sign of it yet. Gutting public housing shouldn’t be an option.

via Public housing: Ford’s futile cash grab – thestar.com.

That the mayor mused even briefly about using revenue from the sale of public housing to plug a gap in the operating budget is deeply disturbing. That sort of strategy doesn’t even pass muster as fiscally conservative. It’s just plain fiscally irresponsible.

For the record, there’s nothing wrong with looking at selling vacant or badly-damaged TCHC units (many of them are very old homes that would be very expensive to fix up) but it needs to be done as part of an overarching plan to improve the state of public housing in the city.

Lurking under a lot of the rhetoric we hear about the TCHC — Sue-Ann Levy’s criticism of some TCHC residents who live in “prime beachfront property,” for example — is the suggestion that we could do housing more cheaply if we packed residents into dense towers, concentrated in a few low-value areas across the city. This is a bad idea for so many obvious reasons that it hurts to even think about.

link — Comments Off on Candidate Rob Ford versus Mayor Rob Ford, on city’s revenue problem
10
Jun 11

Candidate Rob Ford versus Mayor Rob Ford, on city’s revenue problem

From then-councillor Rob Ford’s address to supporters at the Toronto Congress Centre on March 26, 2010. This is the speech where he officially kicked off his mayoral campaign:

I’ve said it a million times. Toronto doesn’t have a funding problem.

Toronto has a spending problem.

City Hall is addicted to wasteful spending.

via RobFordForMayor.ca (PDF).

Yesterday, in an article by the Globe & Mail’s Elizabeth Church regarding the potential sale of more than 900 city-owned TCHC houses, as recommended by outgoing board chair Case Ootes.:

“I agree. Let’s sell these homes. Let’s take that revenue,” [Rob Ford] said. “Obviously, we need the money to fund next year’s budget.”

via Ford plans to sell social housing stock to close budget deficit – The Globe and Mail.

In defence of Case Ootes, he was suggesting the sale of the homes to fund necessarily capital repairs at other TCHC properties. Ford’s desire to immediately plow revenue from asset sales into this year’s operating budget is disturbing.

link — Comments Off on TTC shortfall to be approximately $80m
10
Jun 11

TTC shortfall to be approximately $80m

The National Post’s Natalie Alcoba:

Transit officials are bracing for the city to cut its annual subsidy by 10% next year, widening its budget gap to more than $80-million. And that’s without factoring in a new labour contract with workers that will add millions more, given that every 1% wage increase adds $10-million to the TTC’s bottom line.

via TTC looking at service cuts, fare hike in budget crisis | Posted Toronto | National Post.

That new labour contract is likely to provide a higher-than-normal wage increase due to City Council’s recent decision to designate the TTC an Essential Service.

The only way to significantly reduce the overall cost of the TTC is to lower service standards to the point where riders opt out of using the system. Thanks to aggressive strategies by the previous administration to expand service, TTC ridership has been rising every year. As such, costs go up every year.

Needless to say, a 2012 budget that saw reduced service and a fare increase could set off a chain reaction ridership decline. As more routes lose riders, they can justifiably be cut in future budgets under the guise of efficiency. The net effect would be budgetary savings for the city, but the overall economic impact of transit riders moving to other modes of transportation (driving, most likely) would be very bad for the city.

Related: An OpenFile, John Michael McGrath makes the case for road tolls in a very good piece.

link — Comments Off on City looking at 10% budget reduction
10
Jun 11

City looking at 10% budget reduction

The Toronto Star’s Paul Moloney:

City departments that struggled to meet directives to slash 5 per cent of their annual budgets are now being ordered to double that, for a total cut equivalent to Toronto’s entire parks and recreation budget.

Cutting 10 per cent would save $375.9 million and go halfway toward filling the $774 million gap in the 2012 operating budget.

via City ponders the 10% solution – thestar.com.

This is going to be a bloodbath. Asking departments who just cut their budgets by 5% this year to look at a further cut of 10% is more than a little insane. We’re not a city with a declining population or a stagnant economy. We’re a city that enjoys low property tax rates compared to 905 municipalities and has been getting screwed by a bad financial relationship with the provincial government for more than a decade now.

We’re also a city that should be continuously looking to find ways to save money and create efficiencies, of course. The problem with this administration is that the Rob Ford campaign estimated that there were $230 million in potential savings immediately available in the city’s operating budget. Since taking office, they’ve only been able to identify a small fraction of that figure.

Bright side: Mike Del Grande seems committed to maintaining the land transfer tax. Without it, the city’s budget gap for 2012 would be more than a billion dollars. The Toronto Real Estate Board is mad about this. Duh.

link — Comments Off on Lame budget analogies
09
Jun 11

Lame budget analogies

Budget Chief Mike Del Grande is, to his credit, making a point of attending the consultation sessions regarding the city’s core service review. This is a good thing. Less good are the analogies he’s giving reporters.

Here’s what he told The National Post’s Natalie Alcoba:

“We’ve done all kinds of crazy things down here,” budget chief Mike Del Grande told reporters on Tuesday. “We’ve sold our furniture to pay the rent. We are no different than any family in Toronto who spends more than we earn. We need to get a second job. We would love to send our kids to camp, but it may not be the most nice camp. Or maybe the kids don’t go to camp at all.”

via City turns to citizens to solve looming deficit | Posted Toronto | National Post.

See, the thing about that example is that you have to follow it through. The city is a struggling family, sure. Let’s go with that. But last year the city did have a part-time job. It paid more than $60 million per year. The city quit that job.

The city also ended the past year with a bit of money in the bank. But instead of investing that cash or keeping it around for future years, it decided to use that money to pay for groceries. Worse, it decided to forego taking a salary bump at the job that pays most of the bills. So the saved money disappeared really quickly.

And, of course, the city said nothing to the kids about the possibility of not going to camp at the last big family meeting. In fact, the city promised the kids they would be able to go to the same camp like always.

All this to say: pretending that the operating and capital budgets of a $12 billion metropolis is equivalent to the budget of a suburban family with a dog and 2.3 children is ridiculous.

feature — Comments Off on Rob Ford, October 2010: “I will assure you that services will not be cut”
08
Jun 11

Rob Ford, October 2010: “I will assure you that services will not be cut”

Over at Torontoist, André Bovee-Begun does a hell of a job tearing through the online survey the city is pushing as part of their ballyhooed core service review:

One of the most striking features of the survey: respondents are asked, for any given service, whether “maintaining the quality is more important” or “lowering the cost to the City is more important.” Think the service should be improved? There’s no check-box for that. It provides another misleading set of choices when it asks respondents how they would choose to pay for any cost increases—via increased property taxes, higher user fees, or a combination thereof. Conspicuously absent: the array of other revenue-generating tools the City has at is disposal, such as the now-cancelled Vehicle Registration Tax or the Land Transfer Tax Ford has promised (but cannot afford) to cut. The survey simply chooses from among the full range of options the City could consider, and presents only some of these to the public for deliberation.

via Toronto’s Budget Survey Deeply Flawed – Torontoist.

He’s right, of course. The survey takes a subjective scenario — the city is totally broke and we must cut costs now or face doom! — and presents it as objective. If you believe, as many do, that the city has a revenue problem instead of a spending problem, there’s little opportunity in this survey to express that view. Worse, the survey seems to suggest that the city is clearly trying to do too much, something those who believe in city building definitely disagree with.

I think most people would probably fall somewhere in the middle, believing that there are surely places where the city can find savings but also that more of the money we send to the provincial and federal governments should return to us in the form of services. But even that view is difficult to express given the constraints of the survey.

If you don’t believe services must be cut, you’re crazy. Or so the story goes.

Hilariously, Budget Chief Mike Del Grande has taken to carrying around a plastic piggy bank to remind people that “we have a financial problem that we have to fix.” He speaks as if the city is on the verge of bankruptcy, even though the majority of this year’s budget hole comes from an ill-advised property tax freeze, the elimination of the vehicle registration fee, and mismanagement of the surplus dollars this administration inherited.  (Yes, the city has a structural deficit it needs to tackle but we could have at least made it through 2012 without too much wrangling.)

This week’s National Post Political Panel also looks at the survey and the public consultation sessions that came with it. Even staunch right-wing 905er Matt Gurney wonders about the wisdom of the mayor’s promise “to find hundreds of million of dollars’ worth of gravy while also promising no service cuts.”

Which brings up another point that I feel must be made continuously through this whole process: Rob Ford has no mandate for service cuts. None. As he probably told a reporter who was standing within earshot of the Toronto Star’s David Rider and Paul Moloney last October:

Although his rivals insist Ford’s savings can’t happen without reducing services Torontonians value — and he would need to somehow convince a majority of councillors to agree with his cuts — he insisted there is enough waste to make his fiscal surgery bloodless.

“I will assure you that services will not be cut . . . guaranteed.”

via Ford fiscal plan big on numbers, short on details – thestar.com. (Emphasis added.)

He broke that guarantee less than two months after he took office. And now he’s getting in gear to break it some more.

feature — Comments Off on City ends 2010 with $88m surplus, but no one’s finding fault
06
Jun 11

City ends 2010 with $88m surplus, but no one’s finding fault

Let’s play compare and contrast.

Here’s the Toronto Star’s Paul Moloney, on a recently discovered surplus found on the city’s 2010 books:

The final tally of the city’s books shows there’s an extra $88 million available to reduce next year’s budget gap.

The year-end report for 2010 shows higher revenues and lower costs than had been projected in September.

City finance staff are recommending that the $88 million be used to reduce the $774 million hole in the 2012 operating budget rather than put the money into capital repairs.

via City ended 2010 with $88M surplus – thestar.com.

Now here’s Royson James, writing for the same paper, in March 2010, criticizing Mayor David Miller for announcing that the city had discovered an approximately 100 million dollar surplus on the city’s 2009 books:

But it raises many questions about how the city manages our money – it seems able to “find” massive sums of cash, almost on demand, while crying poor.

Surpluses are obviously better than deficits – cities can’t run a deficit, by law – but budget integrity suggests you levy the amount of money you need to run city services. And if you took more than you needed, maybe you give it back, not continue to raise taxes.

via James: How did a city that’s broke find $100 million? – thestar.com.

Around the same time, the National Post’s Natalie Alcoba interviewed a number of Miller’s council opponents, who piled on the bandwagon that claimed a discovered budgetary surplus indicates poor fiscal management:

“I’m still trying to get my head around the whole notion of finding $100-million,” said Councillor Michael Thompson (Scarborough Centre).

…

“The credibility of the budget is worn fairly thin. I worry by the time it reaches council they will have found more money under the sofas and desks at City Hall,” said Councillor Brian Ashton (Scarborough Southwest).

via Analysis: The looming battle over David Miller’s $105-million surplus – Posted Toronto.

And the venerable Toronto Sun’s Antonella Artuso talked to the mayoral candidates, who at the time were mostly all pretending to be right-wing budget hawks — not yet understanding that the real key to success as a right-wing budget hawk candidate is repetitive slogans and yelling –, getting more of the same type of reaction:

“That means one of two things – that they overtaxed us or they’re incompetent and don’t understand how to do math,” candidate Rocco Rossi said of the shifting surplus.

…

“He will not be the mayor then… now he’s making next year’s budget on the back of an envelope, the same envelope that he’s used to figure out this year’s budget,” Smitherman said.

…

Councillor John Parker said it’s always nice to find money but he wondered why city finance officials didn’t know about it.

“I see that as nothing to be proud of,” he said.

via Miller playing budget games: Critics | Toronto Sun.

Of course anyone who takes a second to think about it understands why these surpluses happen. The city’s budget is, in many cases, little more than a collection of informed estimates. They estimate how many people will ride the TTC, how much fuel the city will use, what the cost of building materials will be, and so on. Plus, revenues from the land transfer tax are highly variable; the city has no way of accurately knowing how many homes will sell in the city in any given year. Essentially, they just guess.

The difference between this year and last year, of course, is that where Miller made a big show of announcing the surplus at a media event, Ford hasn’t gone on record with a comment about this year’s extra money. You have to assume this is largely because he can’t take credit for a 2010 budgetary surplus. This was forged before he was mayor.

Still, though, I wonder if the same critics will continue to throw barbs should this sort of thing continue into the coming budget year.

Related: Not all budgetary news is good. The TTC is facing a shortfall of at least $39 million. Steve Munro has an excellent analysis of the numbers. It would appear that we’re cruising toward a fare increase. And those promised increases in service we were promised following the recent route cuts? Don’t hold your breath.

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