Don't worry, be happy

The city's debt continues to grow but the mayor says costs are not out of control
By SUE-ANN LEVY

Moments before his handpicked executive committee rubber-stamped this year's dismal $7.8-billion operating budget, Mayor David Miller declared that claims about the city's costs being out of control are "simply false.

"I would not like to call it a lie because I don't like to use that language," His Blondness said to applause from his spineless sycophants. "It's very clear the city has a sustainable program reviewed regularly by City Manager Shirley Hoy."

My goodness. I know that the mayor likes to think of himself as the city's CEO. But I never realized he's such a card. Little did I know that yesterday's executive committee meeting would turn into such a comedy fest.

I got so caught up in the festive mood, I wanted to offer my own snappy comeback when Miller asked: "What is going to make the city prosperous?"

"A new mayor," I was so tempted to say.

But seriously, it's silly to suggest costs haven't spiralled out of control since Miller and his socialist spendthrifts took over the reins of power in 2003, when the evidence before the committee suggested decidedly otherwise.

To balance the books this year -- now that the mayor's campaign to exact another $71 million from the province has gone bust -- the city's finance gurus have bled reserve funds within a few millions dollars of being bone dry.

One telling report says that with a reserve fund draw-down of $278 million to eliminate this year's deficit, there is just $24.3 million left in the city's discretionary reserves.

The city still has $1.5 billion sitting in obligatory reserves -- funds governed by legislation -- but the report notes that even in this case major reserves, like employee benefits, are underfunded by $1.5 billion.

NO MORE

As Chief Financial Officer Joe Pennachetti noted, they'll be taking out the last $3.5 million in the social assistance stabilization fund this year, meaning there is no more money to top up the city's welfare obligations, should the economy suffer a downturn.

According to the report, the empty coffers mean the city's debt financing "will likely increase" unless capital projects are reduced in the future or alternate funding is found. If that's not a recipe for bankruptcy, what is?

"We do have to move forward and get agreement from the province on the upload of social services and (with) that, combined with City of Toronto Act revenues, we should be able to balance our budget, hopefully, in 2008," Pennachetti told me.

I'd be all for the province taking care of its social service bills, if it weren't for the fiscally negligent and smug attitude of the Millerites towards our tax dollars.

As the budget documents indicate, since 2004, city finance officials have drawn down $1.1 billion from reserves and one-time sources of funding to pay for council's spending sprees.

During that period (2004 to the present), the province handed over $514 million to the city in bailouts (not including gas tax monies) and has all but forgiven a $200-million, post-amalgamation loan.

Meanwhile, the Millerites have hiked residential property taxes by a total compounded rate of 12.8%.

During the two years from 2004 to 2006, the number of city employees earning more than $100,000 doubled and the Millerites have entrenched a fair wage policy that compels companies wanting to do business with the city to pay their employees bloated union rates.

RICH UNION CONTRACTS

Coun. Denzil Minnan-Wong points out that during his time in power, Miller has also adamantly refused to look at private-public partnerships, has handed his union buddies "rich contracts" and increased his own office budget by 30%.

The mayor's continuous improvement initiatives have been a joke. Hoy acknowledged yesterday that by the end of next year, only 39% of city departments and agencies will have been subject to program and budget reviews.

The Millerites are building a prosperous city? Now that's a laugh.

The city's situation is desperate and Miller is in large part responsible.

"The mayor is his own worst enemy," said Minnan-Wong, "His house is not in order, the roof is leaking and the foundation is cracked and he's not prepared to accept it."