Message from City Manager Joe Pennachetti
The budget process for 2012 proved to be most likely, the most important year in the City's history.
Faced with significant financial challenges caused by chronic use of one-time revenues, growing capital demands and rising operating expenses beyond the general rate of inflation, staff developed a plan in early 2011. Our plan was to balance the 2012 operating budget by closing the opening spending pressure of $744 million, reduce our reliance on one-time revenues, bring spending back in line with revenue growth and hold the line on City debt.
This presented a considerable challenge which placed the City's administration, its public and Councillors in a position to redefine City services.
To address the budget shortfall for 2012, we undertook a number of initiatives including a Core Service Review, Service Efficiency Studies, Voluntary Separation Program (VSP) and User Fee Review. I also requested that all divisions, as well as the City's agencies, boards and commissions, to reduce their budgets by 10 per cent for 2012.
For the first time in the City's amalgamated history, the City launched a review that asked Torontonians and Council what services the City should be delivering through the Core Service Review, a service efficiency review on how to deliver greatest value to taxpayers and a comprehensive user fee review to see how the City can apply user fees in a fair, consistent and equitable manner.
At its special meeting regarding the Core Service Review on September 26 and 27, 2011, Council approved $28 million in service changes and $65 million in efficiencies to be incorporated into the 2012 and future budgets. For example, some of those service changes included the sale or lease of the Toronto Zoo and the City's three government-owned theatres.
The Service Review did what it was meant to do: have a discussion and reset the foundation of City services so that we can forge ahead on determining how and who will deliver services. While the Core Service Review was a difficult process, it has demonstrated that 90 per cent of the services we deliver are, in fact, core services and that the residents of Toronto cherish the services that we deliver every day.
During 2011, expenditure central initiatives such as the hiring slow down, vacancy review process and the Voluntary Separation Program have all contributed to minimizing the impact on staff, as best as reasonably possible, in order to reach the required 2012 balanced budget with minimal direct staff impact as possible.
The budget included expenditure reductions, including a total of 1,035 position deletions from City divisions. The position deletions are comprised of current vacancies, approved positions of a Voluntary Separation Program (VSP), and the balance currently filled by staff. When position deletions from agencies, boards and commissions are included, the total number of position deletions is 1,540.
The User Fee Policy was approved by Council, which provides a framework for setting user fees as it is an important revenue source for the City. User fees represented 26 per cent of the operating budget in 2012 and included fees for recreation programs, water consumption, permits and licence fees, rents, childcare fees and so on.
I am pleased that all of the above actions have enabled us to achieve our financial goals and support the direction of Council and the residents of Toronto. The 2012 Operating Budget of $9.4 billion is balanced and includes a modest property tax increase of 2.5% and a 10-cent fare increase for TTC customers.
Toronto's 2012 Operating Budget was balanced through a combination of $267 million in budget reductions and efficiencies, $60 million in service level adjustments and $345 million in increased revenue. The cost savings from base budget and service efficiencies have limited service impacts, enabling the City to maintain the core services that residents value.
Within a 12-month period, the City was able to complete both the 2011 and 2012 Budgets. This is a first in City history and the start of improved budgeting and fiscal management for the City. With the 2012 Budget approval, the City has reset its foundation for what services it provides – at a more affordable level.
Notable mention from international agencies and community groups for City services over the year included:
- The City of Toronto's Emergency Medical Services (Toronto EMS) won the coveted 2011 International Trauma Life Support Patient Care Competition held recently in Nashville, Tennessee.
- City Clerk's new browser application http://www.toronto.ca/council has won multiple awards for improving access to local government through the use of technology, including the 2011 Willis Award for Innovation for a community with a population over 100,000 by the Canadian Association of Municipal Administrators (CAMA); the EA Danby Award for Excellence in Municipal Administration for cities with more than 20,000 residents; and the Municipal Information Systems Association (MISA) Ontario Award to recognize significant initiatives in the category of Service to Citizens.
- Facilities Operations, Corporate Security/Facility Operations was recognized as one of the 500 best managed security organizations in the world by Security Magazine.
- City of Toronto Fire Services was named the winner of the 2011 International Tony Pini Award for "Diversity and Inclusion in the Fire Service." Toronto Fire Services will receive the award at the International Association of Fire Chiefs (IAFC) Fire Rescue International Conference on August 25 in Atlanta, Georgia.
- The City of Toronto's Lawrence Allen Revitalization Plan received an Excellence in Planning Award in the Municipal Statutory Planning Studies, Reports and Documents category from the Ontario Professional Planners Institute (OPPI).
- The City of Toronto received two awards from the Solid Waste Association of North America (SWANA). The City's communications campaigns for Solid Waste Management were selected to receive the 2011 Gold Communications Excellence Award and the 2011 Bronze Marketing Excellence Award.
- The City of Toronto's Walking Strategy won an award from the Federation of Canadian Municipalities (FCM) for excellence, leadership and innovation in the transportation category. The program aims to build a physical and cultural environment that supports and encourages walking.
- Children's Services was recognized for Municipal Child Care Services by the University of Guelph-Humber for contributions to the field of early learning through the provision of placements and support for students.
- Economic Development and Culture and its BizPal Team won the 2011 GTEC Distinction Award in the Excellence in the Public Service Delivery Category.
- Toronto Film and Television Office (TFTO) Brochure placed third for ""Direct Marketing Piece" - Annual International Locations Trade Show at The Association of Film Commissioners International (AFCI) Marketing Awards.
- Toronto Employment and Social Services won the Crystal Award from George Brown College in recognition of the professional placement opportunities TESS provided to 32 Career and Work Counsellor Program Students.
- Design, Construction & Asset Preservation/Energy & Strategic Initiatives received the 2011 Regional Honours Award from the Canadian Society of Landscape Architects for the Nathan Philips Square Podium Green Roof Garden.
- All 10 of the City's long-term care homes have been recognized with inaugural Residents First Awards. Each home has been involved in quality improvement initiatives. Residents First is an innovative and comprehensive quality improvement initiative that supports long-term care homes in Ontario in providing an environment for their residents that enhances their quality of life.
- The City's financial community received the Government Finance Officers Association (GFOA) award for the Financial Reporting Program (CAnFR Program) for its 2010 Annual Financial Report.
I want to thank members of the Toronto Public Service for their ongoing professionalism and hard work. Despite uncertainty and the challenges of 2011, staff continued to deliver high quality services to the people of this great city.
Joseph P. Pennachetti
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