In last month’s Town Crier, Mayor David Miller had an opportunity to provide his perspective on the civic strike and the settlement that concluded the labour disruption. He claims his bargaining goals were met.
Weeks later and thanks to almost $1 million dollars in overtime, the city is cleaned up and back to business.
But let’s be clear: a financial mess remains. And for this reason alone Toronto residents endured a 39-day strike for nothing.
On day one of the strike, Toronto residents gamely hunkered down for a long, tough fight. They understood important issues were at hand. Mayor Miller himself told residents the city was facing “enormous budget challenges in 2009, 2010 and beyond.”
For this reason he said, “the cost of providing services must be in balance with the revenues the city has to pay the bills”.So let’s review the city’s financial situation.
Mere months earlier, the city passed an operating budget of $8.7 billion, the largest total in its history. The budget was $500 million larger than the previous year and it pushed a six-year spending increase past the $2 billion mark.
The problem of course is the city doesn’t actually take in $8 billion plus in revenue. Rather, there is a significant gap between what the city brings in and what it spends. For the last eight years, this shortfall is more than $300 million.
In 2009, the city made up its shortfall by relying on one-time handouts from Queen’s Park, raiding financial reserves and redirecting money from capital funds.
In short the city spends more than it has and the tools to plug the financial holes are rapidly evaporating.
So before we spend one nickel in 2010, we know we are seriously in the red with little recourse other than cut back or make significant tax increases.
No wonder the mayor was talking tough at the beginning of the strike. No wonder residents were pulling out their personal backyard composters. This might be a long, tough fight, but the mayor was doing what needed to be done!
Frankly, the support of residents would likely have increased if only the mayor had shown more inclination to help people cope. Perhaps empty out the temporary dumpsites? Deal with those delays at the transfer stations? Rather, Torontonians got an earful about illegal dumping.
But let’s get back to the mayor’s claim that his bargaining goals were met. The words he spoke on the first day of the strike set expectations; expectations that were unequivocally reinforced by our financial realities. And on July 10, when he made the city’s offer public, he clearly defined how those objectives would be met.
We know what happened to that offer. So let’s put some numbers behind what was achieved and see how it contributes to resolving our financial challenges.
The salary increase awarded to the 30,000 employees translates into about $180 million over three years. The mayor might have some money squirreled away to cover the wage increase for this year but adding such significant new financial commitments for the years ahead was exactly opposite of what was needed.
With respect to the so-called “elimination” of the sick day bank, the mayor trumpeted his savings of $140 million dollars over five years. The fact remains the roughly $28 million a year in savings doesn’t even cover the annual salary increase. One can only wonder what the cost savings might have been if the mayor had stuck to his July 10 offer of replacing the sick bank system with a short term disability plan and providing a cash payout based on time banked and length of employment.
The one glimmer of good news in this situation is that our spendthrift mayor finally acknowledged the grave financial situation the city is in and presumably, did his best in achieving an affordable solution. It’s a step in the right direction.
The bad news is that he didn’t deliver. Perhaps the mayor is the right guy to put in state-of-the-art green roofs or top-notch washrooms in our subway stations, but maybe he isn’t the guy to put our financial house in order.
We’ll see what happens in 2010.
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