Toronto’s Mayor Tory finds himself painted into a corner, a task he achieved all on his own with a mindless, solitary focus on controlling taxes and reducing waste in government spending. One might almost think Rob Ford was still in the Mayor’s office, especially considering that Tory’s understanding of the City’s financial situation is on a par with his predecessor’s. By “understanding” I do not mean simply reading and digesting reports from the City Manager, but of moving beyond knee-jerk reactions and policies where facts are not allowed to intrude on political fiction.
The fiction that we don’t need more taxes, that there are “efficiencies” to be found throughout the City, has strangled services through the Ford years, and shows no sign of releasing its grip under Tory. Unquestionably, from a starting point back in the “old days”, one might find money to be saved in any organization. However, there is a limit to how many rabbits there are in the budget hat, and as years go on, those rabbits get rather scrawny. In his recent presentations to Council, City Manager Peter Wallace warned that the hat is empty, and that the hocus-pocus by which past budgets have allowed low tax increases cannot continue. New revenues must come from somewhere because cuts simply won’t provide the level of savings required.
Shawn Jeffords in the Toronto Sun quotes Tory:
Tory said he would accept the TTC’s submissions as an “interim report” and assume that further efforts will be undertaken to meet the council directive. He also pointed to a report from the city’s Auditor General earlier this year which said the TTC had only implemented 14 of 53 cost-saving recommendations from her previous reports as evidence that further belt-tightening could be done.
This fundamentally misrepresents that Auditor General’s findings in a May 11, 2016 report:
Of the total 53 recommendations assessed in the current follow-up process, 14 recommendations, or 26 per cent, have been determined as fully implemented. For the remaining 39 recommendations, TTC staff have made significant progress towards implementing the recommended changes. [p 1]
In other words, the TTC is working on all of the recommendations and the AG is not breathing fire with any implication of foot-dragging or obstruction. That’s the implication Tory brings to the discussion with the attitude that if the TTC won’t fix itself, he will find someone to do it for them. As Ben Spurr reported in The Star:
“If (the TTC) can’t do this themselves, and I’m confident they have enough good management there to find these ways of doing things better and differently, then I guess we could help them,” the mayor said.
The AG’s recommendations flow from four reports going back to December 2012.
What, exactly, does “not fully implemented” mean? Have they started? Are they almost finished? Is there a dispute about the validity of the AG’s proposals? How much will each of the changes actually save and, thereby, contribute to “fixing” the TTC’s financial crisis?
The background reports reveal that the “Total” counts shown above are only the items that were not “fully implemented” in previous reports. For example, the December 2012 Wheel-Trans audit had 22 recommendations of which 9 had already been implemented by April 2014 as reported by the AG. The numbers here imply a much lower rate of addressing issues because previously completed items have been dropped from the count.
When one takes the time to read the details, one will find that many of the 39 items listed above are on the verge of being completed, or are dependent on changes (such as updated computer systems) that will address clusters of recommendations in one fell swoop later in 2016. Few of the items will lag into 2017 and beyond, and at least some of these are dependent on other systems or events for their timing.
What is consistent throughout the reports is that outright rejection of the recommendations is rare, and work on many is well underway. Moreover, the dollar savings by each of the changes is rarely stated by the AG and so there is no way to gauge their relative importance and budgetary effect.
Mayor Tory is renowned for being at work at 6:00 am at City Hall digesting his reports. From the way he has presented the Auditor General’s information, it is clear that he does not know that the vast majority of the recommendations have, in fact, been acted on by TTC management. Moreover, he would also know that few of the recommendations have a concrete dollar saving attached, and for those that do, it is not on the scale needed to rescue him from the TTC funding crisis.
The TTC faces a shortfall of $184 million for its base system, and a further $31m for Wheel-Trans. The total budget for 2016 is $1.860.4 million of which $1,736.7m is for the base system, and $123.7m is for Wheel-Trans. Year-end actual expenses will be slightly lower due to some cost reductions in 2016, but the subsidy requirement will be higher due to ridership and fare revenue at a lower-than-predicted level.
This shortfall is very much the product of the political optics of the 2016 budget in which a rosy ridership and revenue projection removed the need for hard discussions about subsidies and allowed a continued focus on service improvements. That particular trick failed when the riders did not show up as expected, and 2016’s budgetary scam is only compounded in 2017. However, this time around, the numbers are too big to fudge.
The Sun quotes Mayor Tory:
“I just think that any big organization, where you’ve got billions of dollars and tens of thousands of employees, there are going to be those opportunities without diminishing service that just see you doing differently, running things better,” Tory said.
Tory, who never gives up the opportunity to spend money the City does not have in aid of yet another feel-good photo op, might be forgiven for confusing the “billions” in the TTC’s capital budget (the one that builds new subways and performs major repairs) with the operating budget that actually provides service (including basics like air conditioner maintenance). Most of the operating costs arise from putting service on the street and maintaining vehicles and infrastructure.
The TTC faced ongoing budget crises twenty years ago thanks to the early 1990s recession. By 1995, the proposed budget cuts were severe, but at least the effects were discussed in the open. The 1995 Operating Budget report and a companion response to a proposed 5% cut in agency spending laid out the situation. In 2016, we have yet to see a public debate on the TTC’s 2017 plans, and the issue has been conspicuously absent from TTC Board agendas. The TTC Budget Committee has not met this year, and currently plans call for a September 6 meeting with the results going to the full Board on September 28. This is hardly an organization chomping at the bit. Is the Board trying to avoid a confrontation with Mayor Tory? Why do we even have a TTC Board if the Mayor’s office will make all decisions of any consequence?
In the 1990s, the TTC took the politically necessary “we can make do” position on funding cuts, but this had major effects on service and maintenance. Then, on August 11, 1995, the Russell Hill crash permanently changed the TTC’s view of itself. Three people died thanks to a combination of poor training and inadequate maintenance.
To his credit, CEO Andy Byford has taken a firm position, or so it would appear, on the level of cuts the TTC can actually endure, but whether his position will win the day either at the TTC Board or at Council is quite another matter. Will Josh Colle, TTC Chair, finally stand up to the Mayor or risk losing any remaining credibility of his office?
The remainder of this article reviews the four Auditor General reports in detail.