The City of Toronto is in deep financial trouble. Despite introducing new taxes on vehicle ownership and real estate transactions and raising most taxes and user fees, the city is still projecting a huge deficit for next year and has shown no indication that it has any strategy to address the problem. Anyone who might wonder why the city is in such difficulty might be informed by a few recent examples of how the city operates;
. the city decided to prohibit downspout connections to the sanitary sewer system - a good move which will reduce the risk of flooding the sewer system during heavy rain storms. The city has a program to do the disconnect free-of-charge for homeowners but set a deadline of this week to apply. The result a ten year waiting period to complete the work. Now the real issue; the cost of materials if a homeowner does the job is estimated by the city at less than $50 (in reality it’s about $10 at Home Depot) BUT the city’s cost is $1,300 per home! Now the works department is going to have to defer repairing water mains that are bursting with increasing frequency because it has to divert funds to the downspout program.
. the city has decided to licence alternatives in street food sales i.e. healthier choice than the ubiquitous hot dogs and sausages now sold. Vendors will need new carts so the city is proposing borrowing $700,000 to buy the new carts and lease them to the vendors while admitting it has not thought about how to handles repairs, etc. Of course the rental program would be run by unionized employees benefiting the mayor’s friends in union executive positions and be far more expensive than the cost to vendors if they acquired the carts through an independent source. If there is a business case for vendors to lease from the city there is certainly a business case for a private operator, but that’s not the Toronto way.
. the transit workers’ union contract is set to expire early in 2008. Last week, the city announced it has set-aside $18 million for wage increases - before negotiations even commenced. What other employer would reveal its strategy before even starting to negotiate?
Whether the city can survive two more years of Mayor Miller without going into bankruptcy remains in doubt but, like New York City in the 1970s, fiscal disaster here might not be such a bad thing.
. the city decided to prohibit downspout connections to the sanitary sewer system - a good move which will reduce the risk of flooding the sewer system during heavy rain storms. The city has a program to do the disconnect free-of-charge for homeowners but set a deadline of this week to apply. The result a ten year waiting period to complete the work. Now the real issue; the cost of materials if a homeowner does the job is estimated by the city at less than $50 (in reality it’s about $10 at Home Depot) BUT the city’s cost is $1,300 per home! Now the works department is going to have to defer repairing water mains that are bursting with increasing frequency because it has to divert funds to the downspout program.
. the city has decided to licence alternatives in street food sales i.e. healthier choice than the ubiquitous hot dogs and sausages now sold. Vendors will need new carts so the city is proposing borrowing $700,000 to buy the new carts and lease them to the vendors while admitting it has not thought about how to handles repairs, etc. Of course the rental program would be run by unionized employees benefiting the mayor’s friends in union executive positions and be far more expensive than the cost to vendors if they acquired the carts through an independent source. If there is a business case for vendors to lease from the city there is certainly a business case for a private operator, but that’s not the Toronto way.
. the transit workers’ union contract is set to expire early in 2008. Last week, the city announced it has set-aside $18 million for wage increases - before negotiations even commenced. What other employer would reveal its strategy before even starting to negotiate?
Whether the city can survive two more years of Mayor Miller without going into bankruptcy remains in doubt but, like New York City in the 1970s, fiscal disaster here might not be such a bad thing.
