Tag Archives: Budget Chief Michael Del Grande

Sometimes A Surplus Is Just A Surplus

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Gather round, all ye loyal readers, and prepare your ears to hear that not heard in these parts muchly. Tis an admission of error on our part. We here at All Fired Up in the Big Smoke were wrong. Wrong, wrong, wrong.

For some time now, pretty near since our inception over two and a half years ago, we’ve suggested that the mayor and his fiscal conservative ilk have budgetary issues, let’s call them. That their numbers rarely add up. In fact, they are an assault upon reason itself.

But the problem, dear readers, may lay with our abacus not theirs. Our eyes blinded by the ideology of government spendthriftry and the love of dwelling in a gravy slathered city. We are wanton with the money of others when restraint is something near godliness. Affix the letters D P E in brightly stitched pink to our breasts and take the keys to the safe from our sweaty, grubby hands and greedy, bleeding hearts.

For you see, yesterday a word was spoken in the halls of City Hall that has seldom been uttered anywhere near that vicinity if uttered at all. A word so delicious to those hungering for the twin notions of fiscal sanity and respect for the taxpayers that all they could do was but to gobble it up, swallow it whole. That word, curious readers?

Surplus.

Ohhh, sweet, sweet surplus. How we have longed to embrace you all these dark, dank days filled with deficits and debt. Let us never part again, shall we? Not? That is to say, tongue tied as I am in your magnificent presence, may we be together forever and never leave each other’s sight. Ever.

How long has it been, dearest one, since your name upon our lips last passed? Last year? 2010? 2009? 2008. 2007. 2006. 2005. 2004… Every fucking year, year after fucking year, Toronto has a surplus. It pretty much has to since the province mandates against municipalities running any sort of deficit on their annual operational side. It would be news only if we didn’t have a surplus not when we do. Because we always do.

No, any surplus news should involve how we went about achieving said surplus. Increases in revenues? Decrease in costs? A healthy mix of both? An unhealthy mix?

For a couple reasons that angle’s not really in the best interest of our current administration. One, while very revenue generating shy (or tax hating in the common parlance), Team Ford would have to accentuate their approach to surplus delivery has not made them wildly popular. Call it ‘finding efficiencies’ or ‘service adjustments’ all you want, it still strikes some especially those directly affected as the exact same as service and program cuts, user fees replacing tax increases. Things Mayor Ford campaigned on never implementing.

More importantly however, any talk of operating budget surpluses being par for the course in Toronto lays waste to the claim that brought the mayor and other hawks to power. It was all about out of control tax-and-spending, costly union appeasing, money burning on sweetheart deals, complete and utter breakdown of order on taxpayer respecting. “Toronto’s financial foundation is crumbling,” Mayor Ford pronounced, not long after using hundreds of millions of surplus dollars from the Silly Socialist David Miller regime to stuff holes in his first budget.

Hold on there, bucko. A David Miller surplus? Hardly. A one-time savings is all. An annual savings that happen every year. Don’t count on that regularly.

Besides much of that repeated one-time savings comes from the loathed Land Transfer Tax and, based as it is on real estate, we know how volatile that is. So undependable we need to get rid of it altogether to free ourselves from such instability. Once we do that, then we can start talking about a strong, stable surplus.

Maybe.

Unless of course widows and orphans come knocking at our door, thinking we’re suddenly flush with cash to spend on their little ‘nice to haves’. Budget Chief Mike Del Grande will know just what to say to nip that in the bud. “I don’t call it a surplus, I call it a positive variance.” Words matter. So get the hell off my lawn.

To ensure all hatches are battened down on the HMS Tightfisted, council’s surplus deniers also delight in pointing out the capital side of things. Plenty of unfunded liabilities there, folks. Any surplus—I mean, ‘positive variance’–must be rolled over onto capital expenses. Otherwise… otherwise… Even former Ford chief of staff and campaign honcho, tough as nails Nick Kouvalis wets his pants at mention of our capital budget outlook. “What’s the Capital Budget deficit,” he tweeted. “Why do reporters not talk about the real issues?”

OK, Nick. Let’s talk about real issues. Let’s talk about our capital budget.

Yeah, it’s big. That tends to happen when big cities need big capital projects like public transit and infrastructure. Just comes with the territory.

It may appear insurmountable to those whose politics are defined exclusively by lowering taxes and cutting spending. So I get why you blanch at those numbers. How the hell can we afford everything that makes a city liveable and prosperous?

Well, we certainly can’t cut our way there. The city manager, Joe Pennachetti said as much earlier this year, suggesting there’s not more than $100 million left in efficiencies to find in the budget. How many subways stops will that buy us? Contracting out some of the city’s waste collection might, might, save us $11 million a year. Contracting out cleaning services looks to save another $800 000. Won’t make a dent on capital costs.

Senior levels of government have largely walked away from their obligations to cities and caught up as they are in the downward spiral of austering us from rocky economic times shouldn’t be expected back any time soon. That well is as good as dry for the time being.

So we’re going to have to figure this out on our own. Operating budget surpluses or one-time savings or positive variances, whatever you want to call them, is the easy part. Everyone does it. Everyone has to. That’s not newsworthy.

What I want to know is how you’re going to spend the money necessary to keep Toronto from collapsing under the weight of small-minded frugality masking as rock solid fiscal stewardship.

— unimpressedly submitted by Cityslikr

Conservative Conundrum

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As the football shit show builds and swirls around Mayor Rob Ford, much chatter continues about his re-election chances in 2014, if there are any re-election chances for him once the courts and city’s Integrity Commissioner are done with him. Who from the left will run against him? Adam? Shelley? Does the barrage of accusations and criticism hinder them or only serve to strengthen the mayor’s core support?

But I’m sitting here wondering, what are the Ford Follies doing to the right wing at council?

Surely, the mayor and his councillor-brother must be hurting the brand. Whatever accomplishments they may try to lay claim to are now getting lost in the disbelief shuffle. Repealed the VR–Sorry, I can’t hear you above the din of special assistant/assistant football coaches. Settled city workers’ contracts without hav—What’s that you’re saying? Apparently city owned cars were used to chauffeur around football players. Cut councillor office expenses. You’re kidding, right. Cut councillor office expenses? Ha, ha. Ha, ha, ha. Hahahahahahahah…!

Before becoming mayor, Rob Ford made few allies at City Hall. That was his schtick, the whole lone wolf outsider, giving the straight goods on council waste, nefariousness and gravy train riding. He manned the parapets of eagle-eyed fiscal conservatism.

As mayor, Ford was able to pull together a loose coalition largely through the bullying use of the power of his office. Sure, there are a handful of true hearted believers in the Fordian crusade to cut spending at the municipal level to the barest of the bare minimum and keep taxes unworkably low. Deputy Mayor Doug Holyday. Budget Chief Mike Del Grande. Speaker Frances Nunziata. Councillor Denzil Minnan-Wong.

But what about the likes of councillors Mark Grimes and Norm Kelly or newcomers like councillors Vincent Crisanti and Gary Crawford? Bona fide, hard core supporters of the cause or just simply along for the ride? It could be argued that Councillor Crisanti owes his fledging career to the mayor’s efforts to unseat former Ward 1 councillor, Suzan Hall. If he keeps his dingy tied to the current ship of state, doesn’t he risk drowning if the whole contraption goes under?

Where does the latest mayoral imbroglio leave councillors Paul Ainslie and Peter Milczyn, both of whom are going about their business, trying to do interesting things within their sphere of influence at City Hall. They owe their positions to Mayor Ford’s appointment largesse. Just how far does their allegiance go because of that? Not to mention Councillor Milczyn was targeted for defeat in the last election by the Ford campaign. He must be itching for a little payback right around about now.

Council conservative stalwarts like Karen Stintz, Michael Thompson and David Shiner have already openly defied the mayor on certain issues (as has Councillor John Parker in a supporting role). Mayor Ford’s weakened position can only encourage further independence and, in the case of Councillor Stintz, a solidifying of leadership in her position as TTC chair. If he wasn’t a non-issue on the transit file before this summer’s series of flaps, he most definitely is now.

Then there’s the wildcard, Councillor Giorgio Mammoliti. A long time foe of Rob Ford right up until he suspended his campaign for mayor in the late summer of 2010, he effortlessly flip-flopped and became a BFF, soaking up the power that comes with sitting at the mayor’s right hand. Why would anyone be surprised if he just as easily reverts back to previous form now that Mayor Ford’s shining star has dimmed significantly? Where’s Councillor Mammoliti been for the last month or so?

In fact, outside of Councillor Ford, the Deputy Mayor and the Speaker, very few of the mayor’s inner circle have rushed to his defence. Fear based loyalty is not all that binding. A marriage of convenience dissolves when it’s no longer convenient. What allegiance to him remains in conservative circles at City Hall is little more than a delicate balance, keeping their distance while espousing similar fiscal policies. Kill the messenger if you must but don’t abandon the message.

If the mayor staggers through all this and is still up for a run at re-election, will other conservatives stand back and allow him to be their standard bearer? That would seem suicidal. Even if Mayor Ford could stage such an improbable comeback, it’s hard to fathom how he would have the coat tails to seriously re-configure council in his favour. So, you’d be facing another four years of council deadlock with little input from the mayor.

It strikes me that a golden opportunity is forming for a moderate conservative candidate to mount a successful campaign for mayor in 2014 even if the nebulous left puts up only one credible opponent. Think about it. Mayor Ford will always have his core support. Pick a number. 20, 25% of voters? Could it be much higher if he continues to alienate every newspaper in this city?

So a right of centre candidate steps up, picks off all the soft Ford support that has abandoned him and claims the middle. All those Torontonians who still believe in small government, low taxes, accountability. What’s that, half the 2010 Ford votes and a sizeable chunk of George Smiterman’s supporters? That would be some hefty number to contemplate.

There’s been much idle chatter since, well probably, October 26th, 2010 about possible winning match-ups against Mayor Ford down the road in 2014. Most of it has involved coming up with 1 candidate from the left side of the political spectrum in order to avoid vote splitting. But I think the real split, the actual divide that’s happening now not 2 years hence is on the right. It’s a split between the dwindling Ford camp and conservatives who still believe in the competency and conscientiousness of government. The bridge between them has been burned and there’s really no going back.

— analytically submitted by Cityslikr

Be Coloured Skeptical

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Before we proceed too far down the 2013 budget deliberation path, I really think we need to set up some sort of Budget Comprehension School. Municipal Budgeting For Dummies 101. For anyone seeking to opine on matters related to the budget process they will have to learn a few basics and pass non-multiple choice examination. City councillors (including our budget chief) and staff (including our city manager), journalists, hoity-toity dilettantes who shall remain nameless.

Barely out of the gate this year, and we already seem to be simply throwing numbers, big numbers around. Yesterday the CBC reported that the opening “shortfall” for next year’s budget was $200 million. “It’s nearly $500 million less than the ‘opening pressure’ identified by the city manager at the start of the budget process in 2011 when city departments were asked to cut their budgets by 10 per cent.” Actually, last year’s “opening pressure” was reported to be some $774 million. So that would make the difference closer to nearly $600 million not 500. But, who’s counting?

Apparently, different people with very different types of calculators.

Last week, when Budget Chief Del Grande went to the Toronto Police Services Board to tell them it’d be all belt tightening for realz this time, and not just some pretend spending reduction, we read that, in fact, the opening pressure was going to be some $465 million. Still, substantially less than last year but not $500 or $600 million less. What gives?

How can we possibly have a reasonable discussion about this city’s financial situation, conduct an honest debate about budgeting when we can’t even agree on a starting point? I get that, especially this early on in the proceedings, it’s all about estimates. We’re still, what, 5 months away from the 2013 budget vote? Never mind about 8 months from the end of the 2012 fiscal year when the numbers really solidify. But can’t we at least settle on something resembling a concrete estimate?

The problem with this “opening pressure”, aside from actually understanding what it is – the total costs the city estimates it will have to pay out in the upcoming year? – comes from it being used as a political football. If councillors and senior city staff want to scare Torontonians into favouring cuts to services and programs or have sign off on a tax increase, the “opening pressure” is always big and seemingly on the verge of being unmanageable without a heroic effort to tame it. On the other hand, if their intent is to display their fiscal acumen, the given number is low. See how we’re managing your money, Toronto.

The number we use as the opening pressure should be fairly straightforward, within reasonable limits of variation since it’s based on educated guess work. I would argue that a $265 million difference within a 5 day span does not constitute a ‘reasonable limit of variation’. Somebody’s playing with numbers. Somebody’s not doing their homework.

And, of course, the opening pressure is only half the equation.

It’s all about projected costs. The full picture doesn’t come into focus until revenues are factored in. Crunching numbers solely on costs would be like tallying your mortgage, car, food, utilities, school tuition and all other personal expenses, panicking about the huge number staring up at you from the bottom of the column and deciding the sell your house to pay for all of it. But.. but.. what about your income? Surely, that’ll help offset at least some of those costs, yes?

An opening pressure is just that, a starting point. It should not be a number wielded above your head like an axe. Whether it’s $200, $465 or $774 million, this is not the amount of money we need to find in order to balance our books. And we always have to balance our books. It’s provincially mandated. So when you read or hear that the opening pressure is x millions of dollars and the implication that follows is that we have to make x millions of dollars in cuts (or raise taxes y percent to generate x millions of dollars) in order to reach a zero balance, step back, cross your arms on your chest and ask, And what about the revenues?

But forgive me. It seems I’m getting ahead of myself here. That’s lesson two. First, there’s still the matter of settling on our opening pressure. Without that, it’s all just hepped-up, partisan politicking.

— numerically submitted by Cityslikr