The City of Toronto released what it portrays as a balanced operating budget that involves a property tax hike and new user fees, but critics say the document shows that overspending continues at City Hall.

"An increase in spending of $502 million -- 5.8 per cent increase in spending when the cost of living is up less than half a per cent," Coun. David Shiner, the city's budget chief during the Mayor Mel Lastman years, told reporters Tuesday. "That tells the story in itself."

Shiner is part of the Responsible Government Group, a coalition of conservative councillors.
Coun. Doug Holyday, another conservative councillor, added: "You come to any council meeting and I can show you millions of dollars that run right out the door. You might as well run right down Bay Street and throw it in the water."

While the proposed $9 billion budget will be balanced, the city was estimated to have had a $382-million gap between revenues and expenses that led to a combination of revenue increases and cost cuts.

"This year's budget, like those before, includes spending restraints, efficiencies, some adjustments in service levels while ensuring our residents continue to receive the programs and services they rely on," Mayor David Miller said in a news release.

The tax hike matches last year's four per cent increase, which means a homeowner who has a home worth $407,374 (the average selling price in Toronto) will pay an extra $93 in property taxes this year. Business taxes will go up 1.3 per cent.

Property taxes make up 39 per cent of the revenue for the city's budget. The hike will bring in $87 million.

"If you live in a condominium or a house in this city, you pay less in residential property taxes than anyone in the 905," Miller told council.

But critics say comparing a home in Toronto to a house in Mississauga is like comparing apples and oranges. They both might sell for the same amount but the house in the suburbs will likely be situated on a much larger property than one could ever hope to get in the city.

Miller said property taxes are more about the city's livability.

"Residents should know that about 70 per cent of their property taxes go to pay for three things: emergency services, provincially mandated health and social services and the TTC," he said.

User fees

Aside from the property tax hike, the city also wants to increase existing user fee revenue by $4 million and collect another $9 million in brand-new fees.

The proposal suggests introducing new fees for:

  • recreation account administration ($50, one-time)
  • gym rentals
  • family pass swim programs
  • participant fees for some sports

Calling in a false fire alarm will result in a fine of $350 for each fire truck that is dispatched. The fine had only previously applied to repeat offenders. Companies that dig into city pavement will face a repair cost of $20 per square metre.

These fees will "avoid service cuts that would severely disrupt or cancel programming," the city said.

A full list of the proposed increases to user fees can be found here.

User fees cover make up about 15 per cent of Toronto's revenue. They cover about 30 per cent of the cost of programming for recreational programs.

Each city department has also been asked to cut spending by five per cent in order to help the city meet its goal of reducing their budget by 10 per cent over two years.

Internal cuts are expected to save $172 million.

The city says it will cut 260 jobs, with 110 of those positions occupied. But there will be new hiring in other areas, resulting in 170 new jobs being added.

The budget suggests:

  • cutting support staff, administrators, project workers and employees with human resources
  • replacing front-counter employees with kiosks and links to 3-1-1, Toronto's information hotline
  • reducing overtime for Fire Services employees who work in marketing, fundraising or fire prevention units
  • reducing bylaw enforcement staff
  • reducing the Toronto Police Service's requested budget by $5.9 million to $956 million
  • reducing salary budgets for councillors looking to hire support staff
  • cutting library hours on Sunday at 27 locations during five weeks in the fall
  • eliminating Saturday service at Toronto courts

The city has also decided to continue their freeze on development charges throughout 2010.

Miller confirmed the city is not planning to sell off its assets to raise funds. Assets such as Enwave Energy corp. could yield the city about $100 million.

"The budget does not include the sale of monetization of any city assets," he said. "Any such initiative should only be contemplated if it's in the best long-term interests of the City of Toronto and never be used to fund any operating budget shortfall."

Provincial help sought

The city found a one-time saving of $290 million, mostly from last year's surplus. Most of that money is destined for the TTC, but Miller wants help from the province in 2011 and beyond.

"We need an agreement with the province on operating funding for the TTC," he said.

Ontario Finance Minister Dwight Duncan told CTV Toronto that if the province decides to provide assistance to the city, an announcement will be made in the next few weeks.

Duncan said the Liberal government will make the decision ahead of releasing its budget in March.

"Generally, we try to respond in a way that works for them and for us," he said.

In recent years, financial contributions from the province have been directed towards the TTC's operating costs.

In the meantime, the public is welcome to comment on the proposed budget at an upcoming budget committee meeting. Interested persons should send a written submission to the city before the meetings are held on March 1 and 2. More information is available by calling 3-1-1.

City council will debate the final 2010 operating budget at a council meeting scheduled for April 15 and 16.

With a report from CTV Toronto's Janice Golding