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Rob Ford for Mayor Financial Plan Backgrounder

Rob Ford for Mayor Financial Plan Backgrounder

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Published by: Rob Ford Campaign on Oct 08, 2010
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06/27/2013

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RobFord’sPlatform–FinancialImpact
It’snotcomplicated.Torontomuststopspendingmorethanittakesin.Torontomuststoptaxingpeopleandbusinessesmorethantheycanaffordifwewanttogrowoureconomy.Torontomuststartlivingwithinitsmeans.Torontomusteliminatewastesoitcanfocuscityspendingontheprioritiesofitspeople–andnotonitspoliticians’petprojectsandperks.
FinancialImpactStatement
Theattached
FinancialImpactStatement
(AnnexA)listsRobFord’splatforminitiativesandprovidesthefinancialimpactofeachontheCityofToronto’sbudgets.
2011.
ThefinancialimpactofRobFord’splatformisanetreductionincityspendingof$525.6millionin2011.Thecity’scurrentestimateoffinancial“openingpressure”for2011is$503million.RobFord’splan,therefore,createsenoughfiscalspacetoovercomethisopeningpressureandclosetheyearwitha$22.6millionsurplus.
Four-YearSurplustoimproveservices,rebuildreserves,paydowndebt 
Overthefour-yearperiodfrom2011to2014,RobFord’splanwillproduceanetsurplusofabout$1.7Billion.Thissurpluswillbeallocatedinthetaxpayers’bestinterestasfollows:
 
ImprovementstoPriorityServices.
OnequarterofthemoneysavedfromreducingwasteatCityHallwillbeallocatedtoimprovementsinservicesthatimpactthequalityoflifeofTorontoresidentseveryday.SpecificprogramallocationswillbemadeinconsultationwithCityCouncilandafterfullcommunityconsultation.Forexample,areasthatmaybefundedwiththesepriorityfundscouldinclude:childcareservices,servicesforseniors,makingTorontomoreaccessibleforpeoplewithdisabilities,affordablehousing,improvementstocity-ownedhousingstock,etc.
 
RebuildingReserves.
OnequarterofthemoneysavedfromreducingwasteatCityHallwillbeallocatedtorebuildingourfinancialreservestoprovideTorontowiththenecessaryfinancial“cushion”todealwithemergenciesandunexpectedexpensessuchastornadoes,disasters,fires,etc.
 
DebtRepayment.
HalfofthemoneysavedfromreducingwasteatCityHallwillbeallocatedtopayingdownthecity’sdebt.Thiswillreduceourannualdebtservicingexpenseandmakeadditionalmoneyavailabletoimproveservicesfortaxpayersortoholdthelineonfuturetaxincreases.
Table1:UseofOperatingSurplus AllocationEstimatedAmount
(2011-2014)
1.PriorityServiceImprovements$416million
2.RebuildingReservesforEmergencies$416million3.PayingDownDebt$833million
Total:$1.67Billion
 
ChangestoCapitalBudget
ThecapitalbudgetisfundedprimarilybyissuingdebtandwithfundscontributedfromthecurrentyearOperatingBudget.
i
Thecity’splannedcontributiontothecapitalbudgetfromoperationsin2011is$182million.Wewillreducethistransferfromtheoperatingbudgettothecapitalbudgetby$125millionin2011and2012.Tooffsetthisreductioninfundingtothecapitalbudget,andtoenablethecitytopaydownsomeofitsdebtearlier,wewillsellsurplusassets(primarilyland).Overfouryears,wewillsellupto$1billioninsurplusassets,withatargetofatleast$125millionin2011and2012.Thiswillmakeupto$750millionavailable,overthefour-yearperiod,foradditionaldebtretirement.Thecityownsover5,000propertiesvaluedatover$12billion.Manyofthesepropertiesaresurplus–orevenvacantlots.
Table2:ChangestoCapitalBudget
ChangeImpact
(2011-2014)
ReductioninCurrentFunding($250million)
Saleofsurplusassets$1Billion
Total:$750million
DebtRepayment
Wewillusehalfthesurplusfundsfromtheoperatingbudget(about$833million)andthenetproceedsofsalesofsurpluscapitalassets(about$750million)topaydowndebt.Thiswillreducethecity’sdebtbyabout$1.58billionoverfouryears.Bypayingdowndebt,wewillreducetheannualservicingcost($430.3Millioninprinciple&interestpaymentsin2010)–freeingupmoneytobeusedonserviceimprovementsforresidentsandbusinesses.
Table3:FundsavailableforDebtRepayment
SourceofFundsEstimatedAmount
(2011-2014)FromOperatingSurplus$833million
Fromsaleofsurplusassets(net)$750million
Total:$1.58Billion
 
LinebyLineNotes
Pleaserefertothe
FinancialImpactStatement 
spreadsheet(AnnexA).
TaxpayerProtectionPlan
1(a).ReductioninCouncillors’ExpenseAccounts.AsannouncedinTPP.Annualsavingsof$899,580.1(b).ReductioninCouncillors’StaffingBudgets.AsannouncedinTPP.Annualsavingsof$1,433,685.1(c).ReductioninMayor’sOfficeBudget.AsannouncedinTPP.Annualsavingsof$512,143.2.PublishCitySpendingOnline.AsannouncedinTPP.Newspendingupto$500,000peryear.3.Open,Transparent&CompetitiveTendering.AsannouncedinTPP.TorontoBoardofTradeestimatessavingsofapproximately10percentonannualpurchasesofover$1billion.Weareestimating10percentsavings,withonly2/3ofsavingsavailableinthefirstyearwhileimprovedprocessesareputinplace.2011savingsof$67million,thereafter$100million.4.ProtectWhistleblowers.AsannouncedinTPP.Nonetimpact.5.EliminateFairWagePolicy.AsannouncedinTPP.Wewilleliminatethecity’sFairWagePolicythatstiflescompetitioninthemarketplace.WewillalsoopenupTTCpurchasingtonon-unionvendorsandcallontheprovincialgovernmenttorescindlegislationthatimposesunfairlimitsonthecity’sabilitytopurchaseservices,especiallyconstructionservices,fromnon-unionvendors.Ouraimistocreateanopenandfairmarketwhichwillbenefitthetaxpayer.Weestimatetheseinitiativeswillgenerateatleasteightpercentsavingsontotalpurchases.Annualsavingsof$80million.6.AccountableVoting.AsannouncedinTPP.Nonetimpact.7.ReducingSecretMeetings.AsannouncedinTPP.Nonetimpact.8.SettingServiceStandards.AsannouncedinTPP.Nonetimpact.9.Measuring&RewardingPerformance.AsannouncedinTPP.Newspendingupto$750,000peryear.10.RealCommunityConsultation.AsannouncedinTPP.Newspendingupto$1millionperyear.

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