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September 29, 2009
Report confirms City saved $33.2 million during strike - Staff recommend that savings be used to offset 2010 budget pressures
  
A report to the City of Toronto Executive Committee confirms that the City saved a total of $33.2 million during the recent 39 day labour disruption.

During the strike, the City achieved its bargaining objectives of reaching directly negotiated agreements that were fair to employees and affordable to residents. The City was successful in negotiating modest pay increases that reflect the impacts of the world-wide recession on the City. The City also successfully negotiated the removal of the provision from the collective agreement that permitted unionized employees to bank sick days and receive a cash-out upon leaving the City. This provision had been in place for approximately 50 years and will no longer apply to new City employees. Current employees will have the option of receiving a partial payout of their existing sick day credits and joining the new short-term disability plan or staying in the current plan. This is consistent with the process used to phase out such plans in other contracts. The City wanted negotiated agreements as previously arbitrated agreements resulted in settlements that were not affordable and maintained the status quo in terms of benefits.

The City has three separate budgets that were affected during the labour disruption:

1. The City's operating budget for City programs which is supported by property taxes and other revenues;
2. The Toronto Water budget which is supported through water rates, and;
3. The Solid Waste Management budget which is supported by the waste fee.

Cost savings in the City's property tax supported operating budget were $36.1 million. The City's total 2009 operating budget is $8.7 billion, of which $3.4 billion comes from property taxes. Many of the City's major property tax supported services are not delivered by employees that were on strike and were therefore not affected by the labour disruption. Police, Fire, Library and TTC services (the cost of which accounts for almost half of the residential property taxes paid on the average home in 2009) were fully available during the labour disruption. Staff is recommending that the operating budget savings realized from the strike be put towards offsetting part of the City's 2010 unfunded operating budget pressures.

Cost savings in the City's water budget were $1.2 million. The total 2009 Toronto Water operating budget is $386.3 million. The water and waste water rates charged to Toronto residents fully support both the operating and capital budgets of Toronto Water.

As a result of the expenses incurred to build, maintain, empty and remediate the temporary garbage drop off locations, there were no savings to the City's Solid Waste Management program budget. The cost of the labour disruption for Solid Waste was $4.1 million. The total 2009 solid waste budget is $320.3 million. The costs of the strike to this specific budget will have an impact on the remainder of the 2009 budget.

In order to maintain services to the City's most vulnerable and deliver a limited level of other city services, as well as operate the temporary garbage drop-off locations and continue operation of the City's water and waste water treatment, non-union and management staff were required to work overtime during the labour disruption. Given the length of the labour disruption and the limited number of non-union and management staff within the City, this group of employees worked significant overtime. Total overtime costs for non-union and management staff was $25.213 million. Over the 39 day strike there were approximately 3,000 non-union and management staff that worked overtime to provide services.

After the labour disruption, limited overtime by unionized staff was permitted to ensure the quick restoration and cleaning of temporary waste drop off locations, and to restore public health's communicable and reportable disease programs. The quick removal of garbage and clean up of temporary drop off sites was done using the City's equipment and allowed the City to immediately eliminate the need to pay for security and pest control at the sites. The use of City equipment and City staff to do this work was done at less cost than hiring contracted equipment and operators. In the month of August, residents were permitted to place an unlimited amount of garbage and recyclables at the curbside for pick-up which added to the total costs for the post-labour disruption period. The total overtime paid to approximately 600 employees was $1.276 million over a period of four weeks.

The amounts reported in the report are preliminary and are based on an analysis of both the expenses incurred and cost savings resulting from the labour disruption. Further adjustments to the reported figures are expected in the months ahead. Final impacts will be reported to Budget Committee as part of the 2009 Third Quarter Operating Budget Variance report.

The report released today will be reviewed by the Executive Committee at its next meeting on October 5. The report includes a detailed breakdown of the costs and expenses incurred during the labour disruption and their impact on the three budgets affected.

The report may be viewed at:

http://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-23752.pdf

Media contact: Kevin Sack, Strategic Communications, 416-397-5277 (office) or 416-919-6500 (cell), ksack@toronto.ca


 

 

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