All Fried Up In The Big Smoke

Less political. More fictional.

DesulTORY

Posted on January 29, 2015 by "Brother" of Cityslikr

I detest hypotheticals. (Also, I defy you to say that out loud and not almost say ‘testicles’.) But indulge me this, and hypothetical away with me for a moment.

Imagine, if you will, a campaign stop during last year’s municipal election. Candidate Olivia Chow is asked how she’s going to pay for some expensive promise she’s just made, what she’s going to cut or how much she’s going to increase taxes in order to balance the city’s operating budget. Ms. Chow responds, Easy. Imma take a line of credit out from the province, use it to plug the gap. Won’t that just cost us more, an incredulous media asks? With interest charges and all that? Putting off dealing with the shortfall for later? Not to worry, the candidate shrugs. What’s a couple of dollars for people in the long run?

Imagine, if you will, her opponent, John Tory, his team’s response to that. Just imagine. The shrieks of outraged joy. TAX-AND-SPENDER!! PROFLIGATE NDP CANDIDATE!!

Just like we heard back last year when Chow proposed increasing buses and bus service. How much will that cost, Olivia? Where you going to get the money, Olivia? If only she had come up with the bright idea of borrowing money from Queen’s Park. Like Mayor John Tory is now to help paper over his increases in spending on things like – I know, right? – increased bus service.

The depths of hypocrisy to which his administration has dug itself into in just 60 days in office is spectacularly audacious. I can’t come close to summoning up the appropriate broadside Christopher Byrd did a couple days ago at the Torontoist. It boils the blood.

John Tory was supposed to be a sober fiscal steward. The municipal budget represented his first real opportunity to make a tough decision, take a tough fiscal stand. He could have decided that City services aren’t worth paying money for; we might sharply disagree with that, but cutting services is at least an honest choice. He could have decided that we all need to pony up for the services we want the City to have. Both of these options would have been unpopular with part of the electorate, but they would have been fiscally responsible.

But Tory didn’t do either of those things; instead, he’s creating additional debt that the City simply did not need to take on—and doing so only to avoid making a difficult call. It’s a cowardly, weak decision, and bodes poorly for his mayoralty.

Yesterday, Matt Elliott laid out 6 ways the mayor could balance the operating budget without resorting to a provincial interest bearing bail out line of credit. While time travelling would be lots of fun (and so many problems we could fix without, hopefully, changing the future), I’d say a combination of 1) raising property taxes a little more than the rate of inflation, with a smidge of 2) using some of the 2014 operating surplus might get us over the hump for this year at least. It also might contribute indirectly to 4) convincing the provincial government to reverse the funding cut. Maybe not this time around but in future negotiations. Show the province we’re willing to reasonably tap our revenue sources. In return, maybe they might start looking seriously at other ways they’re putting undue financial pressure on the city. Their half of the TTC operating budget perhaps?

Instead, Mayor Tory took the easy (for now) way out. He goes to the province, cap in hand, and comes back not with chump change, but with an even bigger debt load the city now has to bear. Prudent. I do not think that word means what our mayor thinks it means.

As terrible a mayor as Rob Ford was, even he didn’t try to take out a loan to balance our operating budget. He got up to a lot of tricks, made certifiably outrageous claims, called things by different names to make it seem as if they weren’t what they were, like ‘service adjustments’ instead of ‘service cuts’. But he never took out a loan.

He couldn’t even if he’d thought of it. Can you imagine, with the toxic relationship he had with the provincial government, Rob Ford broaching them for a line of credit to balance the city’s operating budget? They’d laughed in his face. They wouldn’t even have to make up an excuse why not because, as was pointed out this week, the province’s very own law makes it illegal for municipalities to borrow money to balance their operating budgets. Municipal Act, Section 17, subsection C, I believe it is.

Unless… I’m now guessing… you borrow that money from the province?

No, cities can’t go to a financial institution for a loan in order to fund their ongoing expenses. Neither can cities sell of any assets to do that. This restriction does not apply, it seems, if the province is doing the lending or fire sale purchasing.

Leading me to wonder if the Liberal government has come up with a novel approach to assist them in their own current fiscal struggles. Bankrolling municipalities. It’s an effective if ethically dubious strategy. Keep us financially dependent and then cash in loaning us money when we find ourselves strapped. Deliciously IMF-ish.

This presents nothing but upside for the province. The question is, what’s in the deal for cities? Why would Mayor Tory want Toronto more beholden to the province, the senior partner in this relationship, already pulling so many of our governance and fiscal strings?

Three theories spring immediately to mind.

The mayor’s in over his head. While it’s great political rhetoric to demand government operates like a business, the reality is much more complicated. “Shareholder value” means entirely different things in the two realms. Even balancing public sector books is counterintuitive to self-proclaimed businessmen like our mayor. If Rogers needs more revenue, it just bumps up the price of delivering in their services. The city? More revenue requires tax increases. But tax increases are bad. Square peg meets round hole.

Another possibility is that Mayor Tory is as ideologically hell bent on downsizing the city as his predecessor was. Shrink it into shape and size. Speak of efficiencies and doing more with less. Don’t say as much but all your actions suggest you believe the city has a spending not a revenue problem. Taking on more debt is as good a way to apply downward pressures as any.

The third option might be even more unsettling. Given the mayor’s insistence on deeply entangling the city’s transit plans with the province’s using SmartTrack (Steve Munro provides some examples of that in his interview with Matt Galloway this morning), maybe there’s an even wider convergence, let’s call it, at work here. Further reduce what little independence the city of Toronto currently has in an attempt to wrestle Toronto into a more manageable package as part of an integrated regional form of governance. Rather than use the enhanced powers the province granted Toronto back in 2006 to sort out some fiscal sustainability, Mayor Tory chooses to further indebt us to Queen’s Park. Beggars can’t be choosers. Fall into line or we’ll tighten the purse strings.

That one may be too, I don’t know, House of Cards. Sometimes the best explanation is the simplest one which, in this case, would be the mayor’s flying by the seat of his pants, making it up as he goes along. Whatever the reason, it doesn’t bode well for Toronto.

— uncertainly submitted by Cityslikr

There’s Really Nothing Up His Sleeve

Posted on January 21, 2015 by "Brother" of Cityslikr

Yesterday’s 2015 budget launch left me feeling a little discombobulated. That sense you get after watching a magician try and pull the wool over your eyes for a couple hours. Flim-flammed, bamboozled even.

It was different than the budgetary voodoo Rob Ford attempted while he was mayor. Trust me, folks. This won’t hurt a bit. Those aren’t service cuts. We call them ‘adjustments’.

No. Mayor John Tory’s first kick at the can was all about, what did he repeatedly call it? “The largest investment in service improvements in recent history.”

And credit where credit’s due.

Both public transit and Shelter, Support and Housing (or, at least, shelter and support) received nice bumps in spending, the TTC especially so. It will see service restored to 2010 levels. “Stabilizing of transit,” City Manager Joe Pennachetti called it. A step forward in order to be running on the spot.

In total, it’s about a $1.8 billion increase in spending from last year’s operating budget, leaving some to call it ‘left-leaning’.

But here’s the thing. It’s not immediately obvious where the money is coming from to pay for that spending. In order to balance the operating side of the budget (which, I’ll remind everyone again, it is provincially mandated for municipalities to balance their operating budgets), the city has to come up with the revenue to the penny. $11.4 billion spent. $11.4 billion must be found in revenue.

This staff recommended budget proposes a below-the-rate-of-inflation property tax increase. So it doesn’t cover the inflation-adjusted cost of the delivering of services and programs. That means, in effect, a reduction in the money available for those services and programs. (Here, let Councillor Gord Perks explain it for you. Or Neville Park. Or Alex Mazer.)

Not to mention Mayor Tory’s directive to departments to find 2% efficiencies and city staff’s demand that department’s also ‘absorb the inflation’. This, despite the fact, that the city manager, as he was heading for the exit last spring before mayor-elect John Tory convinced him to stay for one more budget cycle a few months later, told us there was no more gravy to be found, no more fat to be trimmed. Apparently, retirement wasn’t the only thing Mr. Pennachetti reconsidered.

It’s a little of the ol’ robbing Peter to pay Paul. You want improved transit and more shelter space? Well somebody’s got to pay for it, and don’t expect it to be property owners. The pie got bigger but the slices became a little more uneven.

While the budget was a little tax-shy, let’s call it, it certainly embraced user fees. There’s an increase of $14 million in unidentified ones in the document right now. Plus, a good chunk of the TTC improvements this year will be covered by the proposed fare increase, one campaign pledge Mayor Tory seemed comfortable breaking.

On the other hand, drivers are getting the Gardiner Expressway repaired 8 years earlier than scheduled to the tune of nearly half a billion dollars in the capital budget with nary a word about having to chip in a little more to cover the costs. The roughly $60 million the Vehicle Registration Tax once brought into city coffers multiplied by those 8 years would’ve more than covered those costs. Apparently some users are more preferred than others, even in John Tory’s Toronto.

A couple glaring holes still stand between the city and a truly balanced budget. There’s the $86 million one, created when the province decided to end the practice of pooling payments to Toronto to help pay for many mandated social services. Not to worry, the city’s Chief Financial Officer, Robert Rossini, excitedly told us yesterday, a big announcement was coming, talks had been very productive with the province about settling that amount. Everything’s under control.

Turns out, the big announcement seems to be a $200 million line of credit extended to the city from Queen’s Park, including market rate interest charges. Or what some of us might consider a deferred tax increase or user fee. Line up that can so we can kick it down the road a bit.

The other shoe dangling there, waiting to drop is the police budget. While the staff recommending a flatlining of it — I know, I know. That kind of thing always happens. And by always, I mean almost never – the city and the Toronto Police Services are currently negotiating a new collective agreement which almost always results in pay increases for the police. Budget Chair Gary Crawford assures us that money has been set aside for that contingency. How much? He won’t say. (Why would he as it might tip the city’s hand in terms of the ongoing negotiations.)

But as Ben Spurr pointed out in NOW, over the past 10 years, the police budget has gone up some $241 million. So it wouldn’t be unreasonable to expect at least a $20-$30 million bump this year. But again, don’t worry. Everything’s under control. Even after the $86 million, there’s still over $100 million on that line of credit from the province.

Look. It’s not a terrible, terrible budget. Even Councillor Gord Perks says so. There is a big investment in vital needs of the city. But Mayor Tory is still trying to pretend these things can happen magically, without having to say the word ‘taxes’ above a whisper. He’s putting a glossy patina on the Rob Ford maxim of governance. Sure you can have things. And we can get somebody else to pay for them.

It’s fundamentally dishonest and only serves to put off the inevitable, leaving the mess for somebody else to clean up.

— unmesmerizedly submitted by Cityslikr

Uber Allies

Posted on November 20, 2014 by "Brother" of Cityslikr

I am what you would call a late adoptor. In no way am I anti-tech. I have a smart phone. I know my way around the internets. My music is all digital.

But I know I just barely scratch the surface of it all. There is so much more I could be doing, to my advantage. It just doesn’t interest me. I don’t say that proudly. It’s just a matter of fact. I use what comes easily to me. Let’s call it ‘tech lazy’. (I’m sure there’s an actual term for that I’m just not aware of.)

I know even less about the taxi industry here in Toronto. My cab trips are few and far between. One is usually around when I want it. I have no solid price comparison with many other places to know if we’re being gouged or not. My main interaction with the city’s cab happens when one nearly knocks me down or cuts me off in a bike lane when I’m riding around.

There was a big debate this past term at City Hall about taxi licensing. People wearing opposing coloured shirts. I think it had much to do with who owned what kind of license or something or other. Frankly, I tuned out. Let’s call it politically lazy. Since it didn’t have much impact on my life, I couldn’t really be bothered.

So imagine my surprise, sitting here, writing something about a ‘car-summoning’ internet application, Uber, being hit with a cease and desist injunction by the city’s licensing staff for its continued disregard of taxi rules and regulations. Oh wow. Tech versus taxi. How deliciously dull.

Look. I have no reason to suspect that Toronto’s bureaucracy isn’t stodgy and slow-moving in its bid to maintain the status quo. We only have to look at something like the great food truck debate last year as proof of that. Certainly, the staff’s claim of safety concerns in seeking the court injunction ring, I don’t know, a little hollow and manipulative.

And there’s little question too that there are some very vested interests in the taxi game here in town who are well looked after as their phalanx of lobbyists at City Hall can attest to. An argument could be made (by someone much more knowledgeable on the subject than I am) that serious, serious reform is needed. A real shake-up might be nice.

Is Uber the one to do it?

Maybe. I don’t know. I guess we’re going to find out.

Meanwhile, they’ve been breaking the rules in conducting their business in Toronto. 35 by-law infractions, I believe it is to date. They’ve simply ignored them, and carried on carrying on. Toronto is not alone in coping with the new reality introduced by Uber. The company has tended to run afoul of the authorities in many of the places it touches down (as well as some it hasn’t even arrived at yet.)

Somehow though, the city has become the bad guy in all of this.

Even more disturbing is how, to many, the corporate titan Uber has become some sort of saviour. The necessary oomph needed to whip the bureaucracy into 21^st-century shape. A righteous vigilante, stepping up, busting heads and taking questions later.

You can’t make an omelette without breaking a few eggs, am I right?

Fine. Renegade away. But spare me the indignation when there’s some official pushback. You want to flout the law? Deal with the fallout.

Couldn’t the city’s injunction against Uber be something other than just a luddite reaction to shut the service down and box out the future from coming? The company is clearly content to continue ignoring the law, shrugging off each and every bylaw infraction notice. Maybe the injunction is just a shot across the company’s bow. Do we have your attention now, Uber?

You know, if maybe this was some actual David and Goliath fight, I could get more behind it. If it struck me as a justifiable bit of civil disobedience that was out to right some sort of wrong, to make the lives of everyone involved – owners, drivers, customers – better, maybe I might be more sympathetic. Right now, however, it only seems like, I don’t know, more corporate disobedience. I’m a lot less comfortable with that.

There’s a real strain of libertarian thought coursing through the politics of this. If we can do it, why can’t we? Who are you to tell me how, where and when I can grab a cab? Why should some bureaucrat determine what and what isn’t a taxi? Damn your restraints on innovation!

Technology trumps governance.

What the fuck is wrong in saying, look, there are rules and regulations in place here. Obviously, they need to be re-thought according to current realities. Let’s take a step back and sort through this. How can we best try to accommodate everyone’s best interests in this?

Uber doesn’t seem that interested in accommodation. As Ted Graham, “innovation leader at PWC, a professional services network”, told Matt Galloway on Metro Morning, Uber’s approach seems to be to flood a market, build up consumer demand and let the chips fall where they may. We’re here. Deal with it. Tellingly, Mr. Graham avoided answering Galloway’s question about why the onus to adapt should be on the regulators and not the company.

Because… Disruption!

Clearly the plan is working. Many have come to Uber’s defence from a consumer’s standpoint. It’s convenient. For me. It’s cheaper. For me. Why should I have to play by some company’s rules? I want this service. You can’t stop me from having this service. This is the future. You can’t stop the future.

Yeah well, you don’t necessarily have to hand over the keys to the future no questions asked. Who said the future has to be free of regulation and oversight? Grateful consumers not concerned citizens.

— stubbornly submitted by Cityslikr