Automation Gallery
Superstar
If true, this is disturbing.
City must change radically or ‘turn off the lights’
The city’s financial statements for last year — on the agenda of Tuesday’s audit committee — paint yet another disturbing picture of a corporation that has slipped deeper and deeper into debt with no thought given to saying enough is enough.
According to the consolidated statements, the city’s net debt — which has increased by an average 15.65% per year compounded over the last four years — stood at $2.89 billion at the end of last year.
But budget chief Mike Del Grande says they’ll be saddled with debt of $4.3 billion by 2014 largely because of commitments made by the David Miller regime before they left office.
Those bills amount to a scandalous $2.4 billion, if one includes $361 million in legal claims outstanding against city departments for such issues as slips and falls on city sidewalks or damage from potholes.
The claims tally does not include a $100-million lawsuit against the city by merchants and landlords who had to endure the St. Clair dedicated streetcar debacle since the “outcome of the claim is not determinable” at this point.
The statements show there was no end to the spending frenzy on Miller’s beloved TTC.
Granted many of the TTC vehicles are 35 years old or more and need to be replaced. But I’m shocked this kind of buying binge would occur over such a short span of time with little thought to the amount of debt required to fund it.
There is $89 million still owing for 95 of the more than 1,000 buses ordered between 2005 and 2009.
Another $532 million is outstanding for more than 49 subway trainsets for the TTC’s regular lines and the Spadina subway extension.
The TTC awarded two contracts in 2008 and 2010 to purchase 198 low-floor Wheel Trans vehicles costing $70.6 million, $34.5 million is yet to be paid out.
Then there’s $849 million still owing on the 204 LRVs ordered in 2009. The first group of those vehicles won’t be delivered until next year.
“This will take our debt charges from $450 million to $630 million just by standing still,” Del Grande said. “The only way to get a grip is to reduce debt, cash in or sell (assets).”
The consolidated statements — which contain many jewels — also shows a city severely hamstrung by employee benefit liabilities that topped $2.5 billion at the end of last year with a mere $182 million in the piggy bank (relevant reserve fund) to cover them.
Despite the talk of Miller’s great deal to end the 39-day CUPE strike in 2009 and claims 40% of union employees joined a new illness plan early last year, the statements show sick leave benefits liabilities increased from $429 million in 2009 to $434.5 million in 2010.
It should be noted 60% of employees did not opt out of the original plan, which gives them 18 days sick time per year to bank for a payout up to a maximum of 130 days when they retire or leave the city.
But if you think that’s gravy, consider another little bit of largesse for retired employees of the TTC and police, which is buried in the consolidated statements.
After they retire (from their jobs for life) TTC workers with at least 10 years of service continue to get benefits for life — that is, basic health care and dental coverage.
Ditto for all existing retirees from Toronto Police Services as long as they continue to share the cost of the premiums.
Del Grande says there’s no doubt the city needs to be “resized” to match the revenue to the expenses — something that should have been done right after amalgamation.
What they do over the next few months is “not going to be pretty” since people have been “accustomed to a certain lifestyle,” he adds.
He says Toronto’s situation has some similarities to the current problems in Greece, especially because there is going to be “pain” this fall.
“If we do nothing we’ll be left in the position of turning off the lights and closing the doors to the city sometime in November,” Del Grande said. “We’ll run out of money.”
http://www.torontosun.com/2011/07/04/torontos-greece-like-spending
City must change radically or ‘turn off the lights’
The city’s financial statements for last year — on the agenda of Tuesday’s audit committee — paint yet another disturbing picture of a corporation that has slipped deeper and deeper into debt with no thought given to saying enough is enough.
According to the consolidated statements, the city’s net debt — which has increased by an average 15.65% per year compounded over the last four years — stood at $2.89 billion at the end of last year.
But budget chief Mike Del Grande says they’ll be saddled with debt of $4.3 billion by 2014 largely because of commitments made by the David Miller regime before they left office.
Those bills amount to a scandalous $2.4 billion, if one includes $361 million in legal claims outstanding against city departments for such issues as slips and falls on city sidewalks or damage from potholes.
The claims tally does not include a $100-million lawsuit against the city by merchants and landlords who had to endure the St. Clair dedicated streetcar debacle since the “outcome of the claim is not determinable” at this point.
The statements show there was no end to the spending frenzy on Miller’s beloved TTC.
Granted many of the TTC vehicles are 35 years old or more and need to be replaced. But I’m shocked this kind of buying binge would occur over such a short span of time with little thought to the amount of debt required to fund it.
There is $89 million still owing for 95 of the more than 1,000 buses ordered between 2005 and 2009.
Another $532 million is outstanding for more than 49 subway trainsets for the TTC’s regular lines and the Spadina subway extension.
The TTC awarded two contracts in 2008 and 2010 to purchase 198 low-floor Wheel Trans vehicles costing $70.6 million, $34.5 million is yet to be paid out.
Then there’s $849 million still owing on the 204 LRVs ordered in 2009. The first group of those vehicles won’t be delivered until next year.
“This will take our debt charges from $450 million to $630 million just by standing still,” Del Grande said. “The only way to get a grip is to reduce debt, cash in or sell (assets).”
The consolidated statements — which contain many jewels — also shows a city severely hamstrung by employee benefit liabilities that topped $2.5 billion at the end of last year with a mere $182 million in the piggy bank (relevant reserve fund) to cover them.
Despite the talk of Miller’s great deal to end the 39-day CUPE strike in 2009 and claims 40% of union employees joined a new illness plan early last year, the statements show sick leave benefits liabilities increased from $429 million in 2009 to $434.5 million in 2010.
It should be noted 60% of employees did not opt out of the original plan, which gives them 18 days sick time per year to bank for a payout up to a maximum of 130 days when they retire or leave the city.
But if you think that’s gravy, consider another little bit of largesse for retired employees of the TTC and police, which is buried in the consolidated statements.
After they retire (from their jobs for life) TTC workers with at least 10 years of service continue to get benefits for life — that is, basic health care and dental coverage.
Ditto for all existing retirees from Toronto Police Services as long as they continue to share the cost of the premiums.
Del Grande says there’s no doubt the city needs to be “resized” to match the revenue to the expenses — something that should have been done right after amalgamation.
What they do over the next few months is “not going to be pretty” since people have been “accustomed to a certain lifestyle,” he adds.
He says Toronto’s situation has some similarities to the current problems in Greece, especially because there is going to be “pain” this fall.
“If we do nothing we’ll be left in the position of turning off the lights and closing the doors to the city sometime in November,” Del Grande said. “We’ll run out of money.”
http://www.torontosun.com/2011/07/04/torontos-greece-like-spending
