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Cut or be cut, Ford threatens budget holdouts

Toronto Mayor Rob Ford talks to the media during a press conference on his first day as a mayor.

Fernando Morales/Fernando Morales/The Globe and Mail

Cut your budgets, or risk losing your jobs.

That is Rob Ford's warning to the top brass at the library, public health, Toronto police and the TTC, the agencies that defied his demand for cuts in the debut budget he unveiled on Monday - a $10.6-billion plan that includes a tax freeze and a surprise transit fare increase.

"If they are unable to manage effectively in the best interest of the taxpayers, then we will have to find new managers that can," Mr. Ford said.

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The new mayor was particularly tough on the Toronto Transit Commission for its proposed 10-cent fare rise, an increase he is "not happy about," but which the city manager called the price of keeping Mr. Ford's tax promise.

"At the end of the day," Joe Pennachetti said, "We can't get to zero for ... property taxes without the fare increase."

Mr. Ford leaned heavily on revenue windfalls and $346-million in surplus cash - $78-million from 2009 and $268-million from 2010 - to balance his budget. The real pain, he and others warned, won't be inflicted until 2012.

"It's a bunch of good luck," said David Soknacki, David Miller's first budget chief. "The advice is to enjoy it, because it won't happen every year."

However, Mr. Ford also relied on $23-million from an increase of about 3 per cent to fees for everything from parks programs to permits, including a higher charge for false fire alarms.

In a departure that's sure to face political opposition, the budget ends the free ride for adults at 21 "priority" recreation centres. Now the city will charge $68 for nine-week adult programs at those locations, for an extra $200,000 in revenue a year.

The 2011 budget features $57-million in "efficiencies" and minor service reductions, including $225,000 saved by lodging some shelter clients in motels; $139,000 saved by reducing the size of the thrice annual "Our Toronto" newsletter; and $100,000 saved this year by closing the urban affairs library at Metro Hall.

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The fate of that branch has become a budgetary flashpoint.

The Toronto Public Library Board voted against closing the location and moving its collection to the downtown reference library, a decision that contributed to the board's request for a 2.6-per-cent increase to its budget, angering Mr. Ford.

"This whole action by the library board really has been misrepresented, [like we're]somehow thumbing our noses at Mayor Ford and somehow saying this is picking a fight," said Matthew Church, the chair of the library board. "It simply isn't the case."

The library wasn't alone in asking for more money in the face of the city manager's demand for a 5-per-cent cut.

Public health asked for 1.5 per cent, and police for 3 per cent, which Chief Bill Blair and the mayor discussed in a 90-minute meeting on Monday.

The pair emerged committed to finding further savings in the police budget.

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"We had a very, very constructive meeting and I support the chief 100 per cent," Mr. Ford said.

The TTC, meanwhile, will begin to tackle its budget on Wednesday, including the proposal to increase the price of tokens, weekly passes and monthly Metropasses, effective Jan. 30.

Adult cash fares would remain $3.

If the TTC's board approves the plan, tokens would cost $2.60 each, up from $2.50; weekly passes $37.25, up from $36 and Metropasses $126, up from $121.

That works out to $60 more a year for the Metropass, which is the same amount as the vehicle tax that council axed at its December meeting.

"It's clearly a decision ... to give car drivers a break and nail transit users," Councillor Adam Vaughan said. "It's divide and conquer. I guess [Mr. Ford]figures transit riders aren't part of his Toronto."

The TTC is also proposing reducing late-night and weekend hours on 48 bus routes, effective March 27. The commission says it would plow the $7-million in savings into adding buses on busy routes; $3.5-million of that wouldn't be reallocated until September, TTC spokesman Brad Ross said.

Mr. Ford said his political team and TTC staff wrestled over the proposed fare increase right up until this weekend, leaving both sides in the awkward position of having to fashion a compromise in public as the budget review unfolds.

Mr. Ford still wants the TTC to find some way to stop the 10-cent fare increase, but Gary Webster, the TTC's chief general manager, said that would require slashing service and shelving the mayor's customer-service improvements.

Asked whether Mr. Webster's job is on the line if the TTC can't avoid a fare increase, TTC chairwoman Karen Stintz said only that she doesn't question the commitment of the TTC and "if there is a way to avoid the fare hike, we will find that way."

Mr. Webster insisted he's not worried about being fired. "You can't do these jobs fearing for your job," he said.

Senior city staff, including Mr. Pennachetti, favour predictable annual increases to fares in the range of 10 cents, rather than freezing the price for a few years, then slamming riders with a 25-cent rise.

In the $2-billion capital budget, also released Monday, some of the projects Mr. Ford attacked during the election were scaled back or killed, including an $88-million stacked ice-palace for the Port Lands.

City staff have been asked to come back in the spring with an alternative for $34-million in federal funds committed to a waterfront arena.

The solid-waste and water budgets, meanwhile, included widely anticipated 3-per-cent and 9-per-cent rate increases, respectively.

City council will vote on the budget at the end of February, after which the municipal government begins the much tougher task of balancing next year's budget.

"Thank God it wasn't as much pain as some were anticipating," Mr. Pennachetti said of Monday's budget. "Will it be more difficult in 2012? Yes."

- With a report from Marcus Gee

Toronto budget highlights

A more modest Nathan Phillips Square

Mayor Rob Ford slammed the approximately $40-million plan to revitalize city hall's front yard throughout his election campaign. His budget doesn't take any money away from the plan, but it doesn't add any for cost overruns, meaning a planned tourist booth for the corner of Bay and Queen Streets likely won't be built. Neither will a restaurant for the square, unless the city can find a partner to share construction costs.

Nix the 'icescraper'

Staff are recommending the city not move forward on plans for an $88-million, four-pad ice rink that passed by five votes in the previous council's final meeting. Instead, they'd like to see recommendations come forward for more prudent use of the $34-million the federal government has pledged toward a waterfront arena.

Hello to Homeless Hotels

In a bid to save money in shelter costs, the city plans to put up people in need of emergency shelter - but who don't require supportive housing - in hotels and motels. This move toward "alternative" forms of shelter services is expected to save about $225,000. Staff couldn't immediately say how much this is expected to cost per person, per night, or how many homeless people will stay in hotels.

Later, library

Despite a vote against it at a library board meeting last week, staff are recommending shuttering the Urban Affairs library and moving its collection to the city's reference library at Yonge and Bloor. This would save an estimated $100,000 this year.

Higher user fees

The budget recommends raising the charge for "nuisance or malicious" fire alarms to $410 per hour from $350 per truck dispatched, for an estimated $1.7-million revenue boost.

Fees for everything from parks programs to permits are expected to rise an average of 3 per cent, injecting an extra $23-million into the budget. Details will be released later this week.

... and water rates

Mr. Ford is sticking with the city's long-term plan of raising water rates by 9 per cent a year, most of it paying to keep infrastructure in good shape. The increase will add $56 a year to the average water bill.

... also garbage and recycling rates

There will be a 3-per-cent increase to the cost of having your blue and grey bins hauled away from the curb. The new annual prices (after a $224 rebate that reflects what you still technically pay in property taxes toward the solid-waste budget) are $204.36 for an extra large bin; $145.31 for a large bin; and $47.93 for a medium bin. Smaller-bin users earn a credit of $2.84.

Kelly Grant and Anna Mehler Paperny

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Kelly Grant is a health reporter with The Globe and Mail. More

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