TORONTO, Jan. 9, 2012 /CNW/ - Today, Toronto's Budget Committee approved
the proposed 2012 City Budget, moving the budget process forward to the
City's Executive Committee.
The approval comes after the Budget Committee considered reports on the
City's 2011 year-end operating budget variance, final 2011 property tax
assessment growth and Service Review Program.
The City's projected year-end surplus for 2011 is $154 million - of
which $115.5 million has been approved by the Budget Committee for the
capital financing reserve as part of a plan to avoid $700 million in
debt financing for the City's 10-Year Capital Budget and Plan. The
remaining $38.5 million or 25 per cent of the 2011 projected surplus is
recommended to rebuild the City's Tax Stabilization Reserve, the
Employee Benefit Liability Reserve and the Extreme Weather Reserve.
"It has been Council's policy since 2004 to use surplus funds to pay for
capital costs. We immediately need a good portion of the $154 million
surplus to go towards funding buses, streetcars and subways," said
Budget Committee Chair Mike Del Grande (Ward 39,
Scarborough-Agincourt). "The City's efforts in permanently reducing
$355 million from its annual expenditures coupled with additional
efforts to introduce $700 million in non-debt financing for the capital
budget and plan has allowed us to reduce the City's reliance on
one-time surplus revenues from $346 million to $77 million. This is a
major breakthrough in bringing the City's expenses more in line with
"This is simply best practices in financial management," said City
Manager Joe Pennachetti." With the uncertain global economic outlook,
we need to safeguard and restore City reserves to respond to the needs
of Toronto residents and withstand the greater occurrence of extreme
As approved by the Budget Committee today, an additional $700 million in
new financing for the 2012-2021 Capital Budget and Plan is expected to
come from proceeds from the use of future operating budget surpluses in
accordance with the City's surplus policy, potential monetization of
City assets and expected provincial and federal assistance. These
actions are intended to minimize the amount of property taxes used to
pay debt financing costs while maintaining the City's debt service
ratio below its 15 per cent threshold in relation to property taxes.
The proposed 10-year Capital Plan also eliminates the TTC's $2.3
billion financing shortfall by reducing the capital projects required
and by introducing $700 million in new non-debt financing.
"Using future budget surpluses towards the capital budget is good
financial planning," said Chief Financial Officer Cam Weldon." The City
should not rely on budget surpluses to pay for everyday expenses as
they're unpredictable as shown in the reduced surplus projection for
2011 relative to 2010. By reducing our reliance on one-time revenues
we'll be able to know exactly where money will come to pay for City
services in the future."
Also considered in today's Budget Committee meeting was a report on the
City's final 2011 assessment roll which confirms that the City will
receive an additional $8.8 million in property tax revenue in 2012 from
new construction. As a result of the new revenue, the Budget Committee
approved the use of $2.1 million to protect programming at 12 Community
Centres, $0.4 million for 58 Student Nutrition Programs from schools
across the City, and $0.3 million for two pools at Bedford Park
Community Centre and Sir Wilfrid Laurier Collegiate Institute. The
remaining $6 million is recommended to reduce the one-time revenue draw
from the Tax Stabilization Reserve used in the 2012 Operating Budget
balancing strategy from $83 million to $77 million.
In an effort to achieve fiscal sustainability, the City in 2011
conducted a Service Review Program consisting of a Core Service Review,
Service Efficiency Studies and a User Fee Review.
Approximately 28 Core Service Review related actions have been submitted
in the 2012 operating budget for an estimated $49.42 million gross and
$42.82 million net of savings as part of budget reductions. The Service
Efficiency Studies conducted by external firms have identified initial
savings estimated between $167.0 million to $249.1 million to be
realized in 2012 and future years. Changes to existing user fees and
the introduction of new user fees will also generate additional
revenues totalling $14.6 million (exclusive of fees in Toronto Water
and Solid Waste Management Services) as part of the 2012 Operating
Budget. In total, the proposed City budget includes $267 million in
budget reductions and efficiencies, $86 million in service level
adjustments to services and $345 million in increased revenue.
"Continuing into 2013, the City will find savings by identifying
opportunities for consolidation and rationalization of shared services
and breaking down remaining silos," said Budget Committee Chair Mike
Del Grande. "With better information, we'll be able to make more
informed decisions, forge a long-term vision for what Toronto can
become and deliver greater value for every tax dollar."
On January 12, the City's Executive Committee will consider the proposed
budget from the Budget Committee. Toronto City Council will review and
approve the final 2012 Operating Budget and 2012-2021 Capital Budget
and Plan at its meeting on January 17-19, 2012.
For more information, visit: http://www.toronto.ca/budget2012.
Toronto is Canada's largest city and sixth largest government, and home
to a diverse population of about 2.7 million people. Toronto's
government is dedicated to delivering customer service excellence,
creating a transparent and accountable government, reducing the size
and cost of government and building a transportation city. For
information on non-emergency City services and programs, Toronto
residents, businesses and visitors can dial 311, 24 hours a day, 7 days
SOURCE City of Toronto
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