Miller allows private donation to open rinks

If there ever was a sign of how desperate the City of Toronto’s financial situation has become: Mayor David Miller has accepted MasterCard’s offer to pay $160,000 to open rinks in December, a month earlier than planned. A CBC story is pasted below and an article in the Star was posted this afternoon.

Don Wanagas, director of communications for the mayor, told Spacing today, “This is a one time, four-week solution. It is not a model for properly funding our city. We need sustainable funding so we don’t have to deal with these type of offers.”

I have not been on the bandwagon to reverse councillor’s salaries for the reason that I think they deserve the pay raise. But, and this is a big but, when we have such a financial shortfall they should consider reversing the pay hike, especially when the amount saved from the raise would have avoided a private company stepping in for a goodwill marketing opportunity that saves the day. Does the mayor not want to be the one who looks like he’s saving the day? Or is he happy that MasterCard will get all the congratulations?

From CBC.ca:

Toronto Mayor David Miller accepted an offer of private money on Friday to keep outdoor public skating rinks open during the Christmas season.

MasterCard has offered to donate $160,000 to make sure city ice rinks open in December.

As part of a cost containment plan to deal with the city’s $575-million shortfall for 2008, Miller initiated a series of cuts to city services, including delaying the opening of outdoor rinks until January.

The MasterCard offer means the rinks will now be open for Christmas, no matter what happens with the city budget crisis, which is still severe.

MasterCard is offering the money with no strings attached, meaning no advertising at the rinks.

Also of interest, there is an opinion piece in today’s Star on how Toronto’s outdoor rinks are part of political maneuvering.

photo by Sam Javanrouh

33 comments

  1. “MasterCard is offering the money with no strings attached, meaning no advertising at the rinks.”

    So, aside from the press release and reporters mentioning Mastercard’s name in their stories, the public will have no idea that Mastercard is behind this. Essentially, the news media are responsible for any marketing advantage to Mastercard from this donation.

    So what’s the problem again? Why couldn’t the news media (including Spacing) just say that the Mayor has accepted a private donation of $160,000 to keep the rinks open, and leave it at that. If you play yourself into the hands of marketers, you have no one to blame but yourself.

  2. Hamish

    We are an opinion-based blog, not an un-biased news outlet like CBC. If we ignore this contribution then how is the public supposed to find out WHY the rinks are suddenly open when our budget crisis dictated that they would be closed?

    MasterCard will make sure everyone knows about this donation through their newsletter, media releases, speeches, etc.

    Lastly, we NEED to write about it so that people can see that our government is willing to be hypocrites: don’t reverse salary raises but let a private company pay for our outdoor rinks.

  3. I remember reading a letter from someone who pointed out that if the rinks were to be closed it should be the same amount of time but at the back-end, in March. Why? Higher temps in March compared to December – apparently ice-quality near the end of the season is generally poor.

    But nothing screams crisis like no skating at the holidays I guess.

  4. “I can only conclude that the parks department has lost its way and needs to stop hiring new managers or manufacturing new mission statements and get back to basics like operating the rinks they maintain in trust for the citizens.”

    the star story hits the sweet spot.

    and they are hypocrites.

  5. Boy, if I were a city councillor I’d sure be embarrassed right now. And as a Torontonian, I’m kind of pissed. I distinctly recall Miller saying that depsite the fact he feels that councillors deserved the pay raise, rolling it back wouldn’t even put a dent in the $450M shortfall because it would only save around $700K. Yet he’s OK to delay the opening of skating rinks for a measly $160K? What a hypocrite.

  6. I’m disgusted that the Mayor would accept this donation. This is among the most dangerous of pandora’s boxes to have opened. Although there are “no strings attached” to this offer from MasterCard, the first hit is always free.

    If this becomes an accepted practice, Home Depot may be deciding which materials are appropriate for reconstructing Nathan Philip Square, McDonald’s will be funding student nutrition programs and Chapters may just feel generous enough to open up libraries for a few more hours.

    Even if you think my examples are over the top and could never happen, looking at the way planning is done in this city, it seems pretty clear to me that the best case scenario in all of this would result in Council’s agenda being influenced by which core City services are getting philanthropic support from Bay Street.

    To put it bluntly: this is demoralizing.

    Mark, the reason rink closures were scheduled for before the New Year is that staff are trying to build up a surplus in 2007 that can be applied to 2008 so there aren’t deeper cuts next year. As we’ve been through before, even with the new taxes, Toronto isn’t out of the woods by a long shot.

    Jim, while I appreciate the sentiment of the article, that last part just isn’t supported by fact. It’s not at all clear where the 400 additional staff number comes from or whether they’re part-time workers responding to user fee-support programs like swim lessons or if they’re another layer of management. Regardless, I’ve never seen a reference to these new hirings in any City or media report. And the comment about mission statements sounds like entirely empty rhetoric.

  7. Miller is a hypocrite. He won’t let private companies pick up garbage (even though they do it in trucks blazoned with city logos) but he’ll let one save his hide from being roasted like a chestnut on an open fire. Private money is private money. If you don’t like it, oppose it in all its forms. If you think it’s OK allow it elsewhere (including P3 infrastructure).

  8. “This is among the most dangerous of pandora’s boxes to have opened.”

    The Pandora’s Box was opened a long time ago. (For the record, it all started with OMG’s garbage bins.) I’m not sure in what way this is surprising. Miller has made it clear that he is in favour of privatization in any area where it won’t lead to conflict with a union. And he’s already looking for sponsors to fund the Nathan Philips Square redesign.

    Ottawa is seriously considering selling naming rights to public schools.

    I liked what Mike Smith wrote in Now this past summer, that right-wingers on Council are “basically killing time until McDonald’s buys us.” The thing is, the so-called left-wingers (except Janet Davis and Adam Vaughan) are, too. I’d quit the NDP in disgust, if Miller hadn’t already beat me to it.

  9. Potential revenue from new taxes: $345 million
    Hike in councillor’s salaries: $700,000
    Savings from closing rinks during Christmas: $160,000
    Rinks open at Christmas anyway: Priceless

    We get the city services that we pay taxes for.

    For everything else, there’s MasterCard.

    Couldn’t resist …

  10. If you think the rink closings were only a method of getting peoples attention (since the City has been broke for years but we sold Hydro poles to cover it up) then it is genius. People are certianly talking now.

    Somehow though I dont think that Miller et al are that smart. I supported David (there really was nobody sane enough to vote for anyway) but as a supporter am confused as to what the plan is. To me all of this is so simple to sell but for whatever reason Miller has become the leader of the gang that couldnt shoot straight.

    The Mastercard deal, and I think they have good intentions, is a symptom of the problem, not the problem itself. Now I don’t want to be called a Hamish Grant, I quite like him, but there was a time when corporate gifts were highly regarded and thats how Chicago partially raised a billion dollars for art. So yes is a Panddoras box, but we should not discourage it alltogether.

  11. I got so excited about the sudden use of Pandora that I spelled it wrong. And once again a great photo by Sam j.

  12. If corporations have so much extra dough lying around, why don’t we tax them a little harder? I have trouble getting excited when companies make billions in profits and then offer a few crumbs back as a ‘donation’.

    But Adam hit the nail on the head. This isn’t about money, it’s about democracy. Who should be deciding when our rinks are open? An elected Council, or the Board of Directors of a credit card company? Every step towards corporate “philanthropy” is simply a further weakening of our already fragile local democracy.

  13. No one but the city is deciding when or for how long the rinks will be open. Mastercard hasn’t hired a staff of its own to break into facilities and start driving Zambonis. It’s donating money to the city for the city to use to operate the rinks in its usual fashion. There’s no challenge to democracy in a company offering to make a donation — and it could have been rejected by the mayor — but if you want to get democratic about it, I’m 90% sure that if you held a referendum on the issue with the people of Toronto, it would pass with ease.

    Adam, I think you’re conflating this no-strings-attached donation to the city with a raft of other types of corporate involvement, like naming rights and sponsorships. That’s not what this particular event is, and suggesting it will inevitably lead to Home Depot-sponsored construction of Nathan Phillips Square is analogous to the hoary gateway drug argument about a single toke leading inevitably to crack addiction.

    Oh yes, the “crumbs” of corporate donations. All major corporations budget money for donations. Would you rather they held onto the money and paid for some more intrusive ads? Or paid their executives higher salaries? I know, I know, it would be preferable if they made no profits at all. But given that they do — then what?

    It’s embarrassing that the city is actually strapped enough that it needs a donation to open public rinks in December, absolutely. But corporate philanthropy, if in a truly altruistic spirit, is no bad thing. Toronto’s library system, for example, would not be the one we know and love without funding from the Carnegie Corporation — set up by steel tycoon Andrew Carnegie:

    http://www.tpl.toronto.on.ca/abo_his_car_index.jsp

    http://www.carnegie.org/sub/about/biography.html

  14. How much of the federal surplus (that’s $13,800,000,000 more taken in than spent in the fiscal year ending in March) will Toronto get?

  15. this does not seem like corporate philanthropy. this is marketing, straight-up. the Carnegie Corp is not doing library donations to sell more steel. Big difference.

  16. Molly, there is a very significant difference. Money from private fundraising is often used to build or support new capital initiatives outside the essential State of Good Repair work (which, at this point, is not part of the NPS redesign fundraising goal.) But operating funds are very different because they need to be sustainable and their source shouldn’t compromise the integrity of the service. Since you’re using the Library as an example, at TPL, under existing policy, only services considered outside the core program can be sponsored and the funding has to be sustainable.

    This, however, is MasterCard, on a whim, setting the operating budget for in-year 2007. Regardless of MC’s intentions, this one-time fix creates a dependency because, even with the taxes, Toronto will have to grapple with another significant budget gap in 2008. So are we really prepared to let MasterCard decide in its boardroom if Toronto’s rinks — historically and culturally a core service — will be open in 2008? I’m not. I think that’s a job for City Council and my tax dollars.

    On a broader scale, to farm the budget gap out to Bay Street so the most popular services can be saved means that many people will continue to believe that money just falls from the sky(scrapers) and tax dollars go to unnecessary things like the bureaucracy they rarely see and easily malign. I’d rather have a frank discussion about tax levels and service levels than put on another band-aid to protect us from the true costs of a great city. It has to happen at some point and the longer we wait, the harder it’ll be.

  17. A chilling snippet from New Zealand. Since 1993 certain schools have been compelled to accept corporate funding to meet their budgets:

    “Mainfreight’s positive approach to social responsibility has had such a dramatic impact in the Auckland area of Otara that Bairds Primary School voluntarily renamed themselves Bairds Mainfreight Primary School. The school uniform also changed to mirror the Mainfreight uniform.”

    [from a speech by trucking firm Mainfreight’s Managing Director]

  18. One point that has been missed in all of this is that this is a donation, and donations generate tax writeoffs. Therefore, to the extent that MC avoids tax on this money, the rinks are subsidized by all of us through the provincial and federal tax systems. The net cost to MC shareholders is considerably less than the full dollar amount, and the rest, as others pointed out, is a marketing expense.

    MC would pay considerably more for a TV spot that had far less reach than a donation that will keep their name in the news until yearend.

    Now imagine if we had a private sponsor for the Queen Car. People on Queen Street would cut up their cards in disgust at the quality of service.

    Ice rinks are an easy choice — everyone loves them.

    Transit is unloved because it’s such a poor product, you have to pay a lot more than $160K to fix the problems just on one route, and you get all the bad publicity every time Andy Barrie waits half an hour for a car.

  19. donations to municipalities do not necessarily generate income tax deductions at the federal or provincial levels. such deductions are intended for donations to charitable organisations, not governments.

    as for the amount of money that toronto will get from the federal surplus, such surplus will be used to pay down the federal government’s debt, as required by law. such debt pay-down has the effect of reducing the amount of interest the federal government would otherwise have to pay on its debts. such interest savings can be spent on something other than debt pay-down. we’ll see whether toronto gets any of that.

    i personally don’t accept the distinctions made above concerning corporate involvement in capital and operating budgets, as if some big difference exists between those uses of financing. it’s the same: money from a corporation to pay for a public good.

    i also don’t like the suggestion that mastercard and carnegie should be considered differently based on the businesses they do, or did. business is business, whether it’s steel or credit cards or anything else.

    public goods cost money to build, operate and maintain. taxes seem to be the right way to pay for these things. however, presents are nice too, and sometimes it’s okay to accept a gift from a company, say thank you, and not feel bad about it.

  20. I like that corporations are donating to help out the city. And no, I don’t really care what their motives are.

    >> “If corporations have so much extra dough lying around, why don’t we tax them a little harder?”
    Charitable donations are one way companies can pay less taxes. The law was designed that way. Private money goes a lot further than public money.

    Another reason not to tax them a little harder is that it will encourage them to invest money in places other than Canada. (I can see economics isn’t your strong suit, so just take my word that it’s a bad thing)

    **

    Adam, you’re absolutely right that the city should not need donations for basic operating costs. As you imply, it’s a risky thing to be dependent on.
    As for MasterCard “setting the operating budget”, they’re not. They’re meeting it. Setting it would mean they told the city how much it could spend rather than matching the amount the city said it needed.

    **

    I really don’t understand the hostility to companies becoming more involved in doing good things for people. If they didn’t, people would complain companies are only interested in money. Now that they do they’re just doing it for marketing/tax relief/attempt at global domination. It’s impossible to satisfy people except by coersively taking money from the businesses, running it through an inefficient beaurocracy and then spending it where it does not have the feedback of a price system.

  21. “It’s impossible to satisfy people except by coersively taking money from the businesses, running it through an inefficient beaurocracy and then spending it where it does not have the feedback of a price system.”

    In other words… government?

  22. “It’s impossible to satisfy people except by coersively taking money from the businesses, running it through an inefficient beaurocracy and then spending it where it does not have the feedback of a price system.”

    >> In other words… government?

    I was being sarcastic, but yes. For whatever reason, people seem to be very hostile to the idea of people making money and then feeling charitable. I wonder if those who benefited from Warren Buffet’s donation, or Bill Gates charity feel the same.

  23. This seems like a win-win-win situation to me.

    1) Mastercard gets cheap publicity

    2) We get to have our ice rinks (ad free, mind you)

    3) The mayor gets to show how dire of a situation we’re in to have to accept corporate donations to run the city.

  24. Too bad our climate has warmed too much for there to be natural ice in December – so we spend a lot of energy to make some ice in a purpose-built structure – and a few wonder why the climate is changing?
    I wqonder where the interest goes on the $50,000,000 that is in reserve for the Front St. Extension? Nice offices for the TWRC? That might be $2.5M p/a.
    And speaking of the FSE, if we bought four new GO trains for about half of the FSE money (c. $140M or so. we might save not only $100Mplus on the FSE, maybe we could ditch the WWLRT too and save a half-billion and some other related costs like a rebuild of the Harbourfront transit line entry into Union Station. I know it’s capital money, not operating, but there’s some truth to the adage of a tax dollar being a tax dollar.

  25. i also don’t like the suggestion that mastercard and carnegie should be considered differently based on the businesses they do, or did. business is business, whether it’s steel or credit cards or anything else.

    Er, yes. But both Mastercard nor Carnegie Steel should be considered quite differently than the Carnegie Corporation which Matthew Blackett cites above: this does not seem like corporate philanthropy. this is marketing, straight-up. the Carnegie Corp is not doing library donations to sell more steel. Big difference.

    I don’t know what library donations the Carnegie Steel Co. does or does not do. But those have nothing to do with the Carnegie Corporation of New York. The two companies are, after all, unrelated.

    Carnegie Steel is, well, a steel manufacturer which Carnegie started and eventually sold. Carnegie Corp. (CCNY) is a philanthropic entity that Carnegie started a decade later. Its purpose is to give away Carnegie’s money and its fruits.

    So Carnegie Corp. and Mastercard are rather different. The first is the charity of a physical person. The second is the charity of a corporation. Their initial motives for giving away money are in some ways similar and, I suppose, in some ways different. But, once Andrew Carnegie died, any reputation motive on the part of CCNY diminshed significantly.

    All of which suggests two things (to me, anyway):

    1. Corporations that wish to claim altruism when they give money away for useful things (rather than for advertising) should establish an independent entity with a mission statement — like CCNY — give the money to the independent arm, and let that separate organisation manage it.

    In other words, arm’s-length donations, insofar as the philanthropic entity has a charter which binds its action legally.

    MasterCard, incidentally, has in fact done just that. Their global MasterCard Foundation was recently established in Toronto.

    I don’t know whether the money comes from MasterCard or from the MasterCard Foundation. I suspect it is the latter. I guess we will never know.

    2. The arguments above are always going to happen in a non-centrally-controlled economy. As long as people have private money, and give it to things that further the public good, the argument will always be available that the government should have already paid for them as the steward of the public good.

    Let us, at least, distinguish between one-time band-aids and planned recurring donations.

    MasterCard’s (MasterCard Foundation’s?) donation was not expected. It is not recurring. Hopefully, the city will not come to depend on it. But, at least, we can recognize that, as a recurring download, this would have been much more worrying.

    If you compare it, for instance, the arguments about George Soros’ philanthropy — he was spending more in Central and Eastern Europe than a number of the countries in the region were, if I remember right — it’s certainly on the tame side of things.

    3. (I know I said two, but) — re the arguments that MC should be taxed more if it has all this money lying around.

    That argument is really one of lax competition law. Where a company is making more money than it knows what to do with, and others are not entering the market to enter what is obviously a super lucrative business, then there is something wrong with the capitalist system’s assumption that, well, there will be competition for stuff.

    Don’t get me wrong. I’m all about the revolution. But, well, the competition folks are the first port of call on that one.

  26. I started off ready to make a comment, but Dermanus did a pretty good job of covering most of the points I was going to go for. I support those comments…maybe it’s just because I’m a commerce student and I think this is an amazing move for Master Card.

    Honestly, if it weren’t for this entry, I’d have no idea that Master Card was even the reason I can go skating this December. Well….until they start releasing the commercials about how Master Card was there to help little kids fulfill their dreams of being the next Sidney Crosby. Maybe not today, but soon, and for the rest of our live.

  27. Mark, at this point, because of my responsibilities as a member of the Library Board, I need to wait until I have a legal opinion on what exactly the ruling means before I write a post.

    What I can tell you is that in the short-term, the Board will have to determine whether it will accept the ruling or if there are grounds for a judicial review.

    If the ruling is accepted, any compensation package will be negotiated by the Library and the union with the help of the arbitrator, if necessary.

    Regardless of a judicial review, all 27 branches that are normally open on Sundays will be open on Sundays starting October 28.

    In the long-term, we have to determine how the arbitrator’s decision impacts some key sections of our collective agreement, including management rights, overtime, sunday hours, hours of work and lay-offs.

    I’ll be able to provide updates to those who are interested as the process before us unfolds. If and when it is appropriate, I will post an article on Spacing Toronto.

    If anyone has specific questions, send to adamcf @ torontopubliclibrary.ca and I’m happy to answer them as best I can given the delicate legal issues that are at play.

  28. October 18, 2007

    Re: Mayor Miller’s new taxes

    Isn’t it sad that the best this forward thinking Mayor and City Council could achieve, with all the high priced resources at its disposal, is a mere delay of introduction of the Mayor’s new tax proposals until after the October Provincial election. I won’t even touch the ‘cuts’. No politics or punishment here!

    Once again, not a single new thought.

    If the City is truly as financially bereft as the Mayor contends then perhaps he should look inside his very corporation to see where revenue increases could be achieved. And here’s a radical concept, what if these revenue increases could be achieved by doing the unexpected, by improving service with absolutely NO additional, negative impact to the constituents?

    Let me give you a small example.

    As currently exists, if you want to renovate your home in the city, you must apply for a building permit
    and pay a fee, revenue to the City, based on its size. If it is determined there are minor variances, then you must apply to the Committee of Adjustment (COA) for approval in order to get your permit. The City charges a fee, gets more revenue, for a COA application of $636.00. The cost for other variances or larger projects is higher.

    Simple, except for the fact that the COA only meets twice a month and the demand is so high that any applicant finds themselves bumped to a future month, or waiting months on end just for the opportunity to move forward on their project.

    At a recent COA meeting, which lasted all of 2 hours, there were more than 70 applicants waiting to be heard, that day alone! At $636.00 per applicant, that meeting alone raised $44,520.00 in fees, revenue. A simple doubling of monthly COA meetings would raise more new revenue than the amount ‘cut’ by the Mayor for community centres and ice rinks combined.

    Clearly, the Mayor and most of council has yet to seize this opportunity and simply add more COA meeting dates to meet demand and at the same time generate much needed, new revenue. Imagine Mr. Mayor could actually simultaneously be enhancing a valuable service that has proven demand instead of what’s typically, currently done; ignore demand, don’t provide timely service and further frustrate and inconvenience the very customers he claims to serve well. Further, he could avoid the tired, typical act of desperation: initiating new taxes to support spending for no new or improved services.

    What’s obvious to all is the Mayor and council have yet to embrace the concept of a value-oriented strategy.

    Realize, this is but one example. Imagine how many others could be found and how much revenue could be generated without the necessity of another tax? For those of us employed outside of City Hall this is a no-brainer. Successful companies do this all the time.

    So Mr. Mayor et al, if you’re reading and hopefully thinking, realize there are non-confrontational, win-win, revenue-generating existing programs within your control. In this constituent’s mind, you and yours simply have to be more businesslike and open minded than has been demonstrated.
    In closing, I make this offer to the Mayor, let’s talk. If you’re serious about generating new revenues that will be seen as providing real value then we can achieve something. If not …

    Have fun
    Jeff Layton

  29. That’s a pretty ridiculous suggestion, Jeff. Demand for CoA is not determined by the number of items that can fit on an agenda. Sure there are delays and yes it would be helpful to some people if there were more meetings but there is no reason to believe that more meetings would result in more applications.

    Further, the City uses CoA fees to offset the cost of processing the applications and holding the meetings. If there were more meetings and more applications there would be more cost to the City.

  30. Thanks Adam
    But you miss the point and have never applied to COA.

    First, all city services are not revenue neutral. Some operate at a profit and some at a loss.

    Next, in business the general theory is supply (and often price) is dictated by demand. Not so the case in the example I provided.

    The greater the demand, such as has been for many years for COA the greater the supply, in this case meetings, should be.

    Given the City is already set up to handle the administration the only extra cost would be the meeting days themselves and certainly they do NOT cost tens of thousands of dollars each. The rest would be profit to be used elsewhere.

    Regardless, it is an example of the city ignoring their own revenue generating systems or ‘products’ that could be generating still greater revenues.

    Certainly if demand drops off the city should reduce the number of meetings proportionately, just like any other service provider would.

    The point is to identify alternative revenue sources available to the city besides new taxes. This is a small step in that direction.

    Perhaps you could add another?

    have fun
    jeff

    BTW the value of Building Permits alone has outstripped the value of new home construction for many years.

  31. thats amazing, the comment about mainfreight made by Juliet
    October 13, 2007 @ 9:50 am

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