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January 12, 2012
Executive Committee approves budget for fiscal sustainability
Executive Committee's approval of the 2012 City Budget moves the City's finances closer to fiscal sustainability by reducing its reliance on one-time revenues from $346 million to $83 million. The proposed 2012 City Budget focuses on changing the course of City finances through $267 million in budget reductions and efficiencies, $80 million in service level adjustments to services, $345 million in increased revenue and a plan to inject $700 million in non-debt financing into the City's capital budget to pay for projects related to TTC ridership growth.

"This is good news for taxpayers in Toronto - this budget is a smart budget, it's a reasonable budget, it's a responsible budget," said Mayor Rob Ford, Chair of the Executive Committee. "Average families feel the pinch every day and average people are not getting raises. They can't afford a tax increase more than 2.5 per cent, not a penny more and they need us to make decisions that keep their taxes affordable. We will put our $154 million surplus where it belongs: to pay for TTC vehicles we've already ordered."

The proposed budget now approved by the Executive Committee recommends $154 million of the City's 2011 projected year-end surplus to be used as part of a $700-million non-debt financing strategy for the proposed capital budget. Other non-debt financing is expected to come from future operating budget surpluses, proceeds from the monetization of City assets and expected provincial and federal assistance.

"With the growing demands on transit, the City's capital budget accommodates TTC's revised capital plan which includes the most important transit projects on the list," said Budget Chair Mike Del Grande (Ward 39, Scarborough-Agincourt). "It's now up to Council to decide if they want to build a sustainable, affordable and well-managed city by approving this proposed budget. Toronto services must be cost-effective, efficient and deliver the best value."

In future budgets, the City expects to hold the line on debt charges, minimize the amount of property taxes used to pay debt financing costs in the operating budget and maintain its debt service ratio below its 15 per cent threshold in relation to property taxes. Currently on the average property tax bill debt charges is the third largest expense after Police Services and TTC.

"Without the funds from the 2011 year-end surplus and monetization of City assets, the City would have reached its debt ceiling in 2015 and would not have any safeguards should capital repair emergencies arise or if interest rates rise above what we expect," said Deputy City Manager and Chief Financial Officer Cam Weldon. "I'm pleased that the City's Executive Committee has approved the budget largely as presented by the Budget Committee."

"For the first time since amalgamation, the City is getting its spending under control and has reset its level of services according to its revenue streams," said City Manager Joe Pennachetti. "With ongoing efforts to find efficiencies, City Council can potentially bring fiscal sustainability to Toronto and thereby eliminate the City's structural deficit by 2014."

Toronto City Council will review and vote on the final 2012 Operating Budget and 2012-2021 Capital Budget and Plan at its meeting on January 17-19, 2012.

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Toronto is Canada's largest city and sixth largest government, and home to a diverse population of about 2.7 million people. Toronto's government is dedicated to delivering customer service excellence, creating a transparent and accountable government, reducing the size and cost of government and building a transportation city. For information on non-emergency City services and programs, Toronto residents, businesses and visitors can dial 311, 24 hours a day, 7 days a week.

Media Contact
Wynna Brown
Manager, Media Relations and Issues Management

Cindy Bromley
Manager, Finance Communications



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