posted August 20, 2007

2007 BUDGET MATH FROM OUR “CELOS” RESEARCH GROUP:

Mayor David Miller lost the first round of his attempt to gain some more taxes for the city by charging drivers and new house buyers extra. He may win the next try – after all, cities are legally required to balance their budget, and the 2007 municipal budget was over half a billion dollars too high. City Council will have to do something. Here’s the math:

The big-picture financial situation: Toronto’s debt (also called “liability,” from capital expenditures and employee WSIB claims, retiree benefits, sick-leave pay-outs and employee separation costs) has increased every year and is now $2.39 billion. (For comparison, from 2005: Montreal: $6.049 billion debt. Ottawa: $253 million debt. Vancouver: $7 million debt. Calgary: $561 million assets. Edmonton: $2.531 billion assets.) Interest payments on the city’s debt come from the city’s operating funds: almost $203 million last year, if we read the financial report right. And Toronto’s operating expenses continue to rise. In 2005 the gross operating budget was $6.8 billion; by 2006 it had risen to $7.1 billion.

The Parks, Forestry and Recreation financial situation: It’s no better. The major chunk of the operating costs is staff payroll, and in the last four years, as the budget over-run increased, so did the size of the Parks, Forestry and Recreation staff. Management staff seems to have gone from 161 to 226 in since 2003, an increase of 65 management positions. 25 of those staff plus the general manager earn over $100,000 (several earn close to what the mayor earns, on either side.) During those four years, permanent full-time staff went up by 250, from 1556 to 1806. The increase of part-time/seasonal/casual staff during that four years brings the total “full-time equivalent” positions at Parks, Forestry and Recreation from 3592.7 in 2003 to 4005.7 in 2007, with another 111 positions approved for the 2007 budget: a total increase of over 500 positions in four years. (Note: these numbers are taken from the analyst budget notes and audit reports of the various years. The reports are rather confusing, and CELOS tried to check these numbers with the financial staff. However they were unable to respond within two weeks.)

Meeting such a payroll is made even more difficult by the City’s cost-of-living allowance and union agreements, which mean that even if no more staff were hired, the payroll for Parks, Forestry and Recreation would still go up by around $10 million (wage increases) every year. And from the 2007 budget analyst notes: “Due to the mix of its staff complement, the Program’s salaries and benefits are likely to be overspent again in 2007. No provision has been made in the 2007 Recommended Operating Budget for higher overtime costs or unachievable gapping targets.”

But the staff numbers don’t tell everything. The disparity in incomes among Parks, Forestry and Recreation workers is also remarkable, with some supervisors of as few as 3 -12 people earning up to $87,000 a year while many recreation program staff make less than $20,000, with little outlook for improvement. In addition, during this time of steep workforce increase, the number of plumbing staff to fix water-fountains and park toilets was cut in half, and picnic tables and benches stopped getting repaired.

The payroll together with other costs means that the Parks, Forestry and Recreation budget 2007 is around $303.4 million gross (we couldn’t find the exact number in the documents). Revenue from permits, user fees and various provincial and federal grants reduces the budget size to $226.146 million. But that’s still quite a lot.