Toronto reduces services now to lower next year’s operating budget shortfall: Without new revenues 2008 will require further service reductions and/or significant tax increases|
| || ||
The City of Toronto today announced cost-containment measures that will require immediate service-level adjustments and reduce the 2008 operating budget shortfall by at least $83 million.
As part of the cost-containment process requested by Mayor David Miller last month, City Manager Shirley Hoy and her management team have identified more than $34 million in operating budget reductions that will be put in place for the remainder of 2007. These measures include the Monday closure of all City Community Centres from mid-September until the end of the year, reduced library hours, delayed opening of outdoor artificial ice rinks, reduced pickup of yard waste and leaves, cancellation of planned door-to-door waste pickup at townhouses, reductions in snow removal services and litter pickup, reduced maintenance of City parks and trees, reductions in bylaw enforcement and building inspections, and early closure of all municipal golf courses.
City Manager Shirley Hoy recommends that these immediate measures be continued next year to reduce the forecasted 2008 operating budget shortfall of $575 million by at least $83 million.
“The measures taken today are necessary to address the impact of not having the revenues required to provide basic municipal services,” said City Manager Shirley Hoy. “The solution to the City’s financial challenges must include three strategies: the Province of Ontario should pay the true cost of their programs, the Province should resume permanent operating budget support for the TTC and the City must obtain new and diverse sources of revenues.”
The measures announced today include both the cost-containment initiatives announced last month (such as a hiring freeze and the elimination of discretionary spending) and service level adjustments (see backgrounder) to be implemented immediately. All of these measures are in addition to any other under-spending of budgets which may take place within the City.
“The cost-containment measures announced today are most regrettable, but unavoidable,” said Mayor David Miller. “The choice is now clear. Toronto Council can support investment to meet the needs of a growing city or it can oversee the continued erosion of our quality of life.”
The measures announced today have significant impact on municipal services and will reduce the City's current ability to continue with a number of city-building initiatives.
As cost containment measures and service level adjustments were reviewed by each division, the following principles were applied:
- Service standards and/or service levels were to be adjusted to achieve targets.
- Service level adjustments were not to affect the most vulnerable.
- New or enhanced services approved by Council have been deferred
- Full elimination of major programs or services would not be recommended since they require Council approval.
- Capital projects will proceed only if they do not affect operating budget reduction targets.
The City identified 376 positions that will remain vacant as part of the hiring freeze. Any staffing that does proceed will require the approval of either the Deputy City Manager or City Manager and will take place only in cases where staffing of the position is required to meet legislative or health and safety requirements or is critical to service delivery.
To place the City on a firm financial footing, the Province of Ontario must pay for the programs it requires the City to deliver and provide permanent financial support for TTC operations. In addition, the City must have new sources of revenue that grow with the economy. Unlike the provincial and federal governments which have access to income and sales taxes, the Government of Toronto must depend almost entirely on property taxes that do not grow with the economy. Without new sources of revenue, it will be necessary for Council to consider further service reductions, the elimination of programs and services and/or significant property tax increases in 2008.
The Toronto Transit Commission (TTC) and the Toronto Police Service (TPS) have provided a preliminary estimate of 2007 cost containment measures equalling $9 million, $6 million from TTC and $3 million from Police. Work is underway by both services to review further reduction options for the remainder of 2007 and 2008. The Transit Commission and Police Services Board will consider these options in the fall.
At a briefing session today, the City Manager highlighted that the City continues to have only 25% of its budget available to find the majority of budget reductions, since the remainder of the City's budget is used to pay for provincially-mandated programs, transit and emergency services.
“Toronto is the only city in North America with a population of over two million people that continues to rely solely on property taxes to deliver services,” said Councillor Shelley Carroll, chair of the City Budget Committee. “A city as large and diverse as Toronto, with unique transit and policing needs, requires sources of revenue other than an unfairly structured property tax system to pay the cost of the services the City needs to succeed.”
One-third of the City's total operating budget continues to pay the cost of provincially-mandated programs where the standards and level of service, and therefore the costs, are dictated by the Province of Ontario. Ontario is the only province in Canada where social programs are paid for through property taxes. In 2007 alone, more than $729 million was diverted from property taxes to the pay for these provincially mandated programs. Since amalgamation, the cost to Toronto taxpayers has been more than $4 billion. Another third of the budget is dedicated to paying the cost of the three emergency services and transit. As a result, the budget reductions announced today come primarily from the portion of the City's operating budget dedicated to core municipal services.
Toronto is Canada's largest city and sixth largest government, and home to a diverse population of about 2.6 million people. It is the economic engine of Canada and one of the greenest and most creative cities in North America. In the past three years Toronto has won more than 50 awards for quality and innovation in delivering public services. Toronto's government is dedicated to prosperity, opportunity and livability for all its residents.
Kevin Sack, Strategic Communications, City of Toronto, 416-397-5277
Don Wanagas, Director of Communications, Office of Mayor David Miller, 416-338-7134
August 10, 2007
Toronto reduces services now to lower next year’s operating budget shortfall
The City of Toronto today confirmed cost-containment measures and service-level adjustments that will reduce the 2008 operating budget shortfall by $83 million. Toronto Mayor David Miller directed the City Manager to implement cost-containment measures on July 20 to reduce the forecasted $575 million 2008 operating budget shortfall.
City officials have identified more than $34 million in operating budget reductions that will be in place for the remaining five months of the year (August to December 2007). The budget reductions identified are being recommended for 2008 and will therefore reduce the operating budget shortfall by $83 million in 2008.
The following information outlines the major service-level adjustments to be implemented between August 1 and December 31, 2007. Additional budget reductions may also be recommended for consideration in the 2008 budget, depending on any additional funds that are generated through new taxation and uploading of provincial government social service programs currently funded by the City. All City programs and services, agencies, boards and commissions were requested to identify cost-containment measures.
Parks, Forestry and Recreation – Beginning mid-September to the end of December, 2007, all of the City’s Community Centres will be closed on Mondays. All programming held on Mondays will be cancelled. Outdoor artificial ice rinks scheduled to open in December will not open until January and the City’s golf courses will close one week early. Residents will see reduced park maintenance and a reduction in the residential tree planting program.
Garbage and recycling (Solid Waste Management Services) – Releasing seasonal litter staff two weeks earlier than normal and a reduction in the number of litter vacuums will result in more litter on the streets. The December yard waste pick-up will be cancelled and the scheduled introduction of curb-side pick-up at townhouses is cancelled. The night shift at the Disco Transfer Station will be cancelled, requiring contractors and residents to drop waste at that location during daytime hours.
Transportation – To further reduce costs, there will be less street cleaning, fewer pothole repairs and a reduction in the number of times grass is cut on City streets and expressways. Sidewalk snow plowing and clearing of snow left in driveways (windrow) by City plows will only occur when there is a minimum of 15 cm. of snow, the current service standard is 8 cm. Automated leaf pick-up in areas that have this service, will be reduced from two pick-ups to one.
Toronto Public Library – Access to 16 library branches will be restricted due to Sunday closures. The Storyteller in Residence and the Teen Fine Forgiveness programs have been cancelled.
Toronto Public Health – As a result of the hiring freeze, there will be a reduction in health promotion programs and community outreach services such as tobacco use prevention, parenting programs and workplace health. In addition, Toronto Public Health will reduce environmental reporting, production of printed materials to support tobacco use prevention, the new Food Guide, Trans-fat education, and translation of various materials into languages other than English.
Municipal Licensing and Standards – As a result of the hiring freeze, there will be significant delays in issuing licenses and responding to requests for inspections and bylaw enforcement, particularly for graffiti eradication.
Emergency Medical Services – The bicycle paramedic program in the Entertainment District will be reduced from four days a week to two days a week.
Fire Services – There will be a decrease in proactive inspections and public education programs.
Toronto Building – Due to the hiring freeze, there will be reduced bylaw enforcement, particularly the Sign bylaw. The public submitting development applications will also experience delays at building application counters. The Green Roof Initiative will be delayed. The adoption of a bylaw regulating construction related vibration will also be delayed.
Court Services – By redeploying 50 per cent of the staff who work in the customer phone service office, there will be as long as 20-minute wait-times for telephone inquiries. Clients may be referred to the internet or be required to visit court offices in person.
Children’s Services – Funding for new services at community run family resource centres in under serviced areas has been cancelled until the end of the year. Funding to make City-operated daycares accessible to clients with disabilities has been deferred.
Mayor’s Office – Renovations to the Mayor’s office and the second floor of City Hall have been cancelled. Additional staff needed to meet requirements of the City of Toronto Act will not be hired. The Mayor’s initiative on Economic Development Opportunities for Toronto to promote investment has been deferred, resulting in cancellation of the economic mission to China and Los Angeles.
Administrative Divisions – As a result of the hiring freeze and other cost containment measures, service provided in administrative areas of the City which directly support day-to-day operations will be reduced. Reduced service will be in effect at parking tag counters, tax and water counters, and vendors will experience delays in the payment of invoices. In addition, services that support front line staff, such as Information Technology, will be reduced resulting in longer system down times and impact public service.
Budget reductions will also be attained through a hiring freeze in all City divisions, with the exception of those positions that are deemed essential under legislated requirements, needed for health and safety reasons or are 100 per cent funded by other orders of government or external agencies. A position by position review of the City’s current 677 full time vacancies was completed and it has been determined that 376 jobs will not be filled. All staffing requirements must first be approved directly by the City Manager or Deputy City Managers.
Unless mandatory, staff training, development, education and attendance at conferences has been cancelled. A significant amount of advertising and promotional materials has also been cancelled. Required purchases of new vehicles and other equipment have been cancelled. In addition, all discretionary travel has also been cancelled. This has an impact on public education activities and key programs and services, as well as the City’s ability to attract economic investment and tourists from abroad.
Brad Ross, Strategic Communications, 416-392-8937