{"id":17277,"date":"2011-01-17T12:20:10","date_gmt":"2011-01-17T16:20:10","guid":{"rendered":"http:\/\/spacingtoronto.ca\/?p=17277"},"modified":"2011-01-17T12:25:46","modified_gmt":"2011-01-17T16:25:46","slug":"lorinc-even-the-right-will-raid-the-reserves","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2011\/01\/17\/lorinc-even-the-right-will-raid-the-reserves\/","title":{"rendered":"LORINC: Even the right will raid the reserves"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" src=\"http:\/\/farm4.static.flickr.com\/3084\/2816258213_c3d8162bcf_z.jpg\" alt=\"\" width=\"601\" height=\"398\" \/><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone\" src=\"http:\/\/spacingmedia.com\/uploads\/toronto\/feature-lorinc.gif\" alt=\"\" width=\"600\" height=\"85\" \/><\/p>\n<p>An eagle-eyed Spacing reader wrote this week to point out that Mayor Rob Ford and his chief bean counter Mike Del Grande are relying on a $25 million draw against the city\u2019s reserves to help balance the 2011 budget with no property tax increase.<\/p>\n<p>Anyone who\u2019s hung around the giant clam in recent years knows that when Ford and his merry band of waste-busters were in opposition, they railed loudly and often about the perils of reserve raids.<\/p>\n<p>In 2007, as Del Grande was bemoaning the city\u2019s imminent bankruptcy, Doug Holyday told The National Post, &#8220;The fact is we&#8217;ve [taken] $384-million [from reserves], which would be a further 19% tax increase on top of what&#8217;s already 4%, it&#8217;s alarming.&#8221;<\/p>\n<p>In 2009, the Responsible Government Group (RGG), which was chaired by Case Ootes and included several members of Ford\u2019s executive committee, presented an alt-budget that called on council to put $44 million back into the welfare reserve. As the RGG\u2019s folksy values statement noted, \u201cWe understand that you expect the City to manage its budget like you manage your own \u2013 by making the right tough choices, living within its means, keeping a bit of reserve for unexpected emergencies, and managing the budget for the benefit of the whole family. [Emphasis added].<\/p>\n<p>I guess the moral math computes differently now that power has sloshed to the other side of council.<\/p>\n<p><!--more--><\/p>\n<p>Ford\u2019s pragmatic use of the reserves, combined with the hefty surplus bequeathed to him by the previous crew, is not only hypocritical. It also runs contrary to a very broadly supported <a href=\"&quot;http:\/\/www.toronto.ca\/finance\/pdf\/long_term_fiscal_plan.pdf\">\u201cLong-Term Fiscal Plan\u201d<\/a> [PDF] approved by council during David Miller\u2019s first term &#8212; something <a href=\"https:\/\/spacing.ca\/toronto\/2010\/03\/22\/lorinc-doing-the-surplus-two-step\/\"> I noted in this space<\/a> when the former mayor did his surplus surprise shtick last spring.<\/p>\n<p>At its April 12-14, 2005, session, council adopted the plan, which specified, among other things, what the city should be doing with its operating surpluses:<\/p>\n<p>&#8220;Starting with fiscal 2005&#8230;the Chief Financial Officer and Treasurer is authorized&#8230;to apply any additional surplus in priority order to:\u2028Capital Financing Reserve Fund (at least 75% of the additional surplus);<\/p>\n<p>and<\/p>\n<p>\u201cThe remainder to fund any under-funded liabilities; and\/or reserves\/reserve funds, as determined by the Chief Financial Officer and Treasurer&#8230;&#8221;<\/p>\n<p><a href=\"http:\/\/www.toronto.ca\/legdocs\/2005\/minutes\/council\/cc050412.pdf\">According to the minutes<\/a> [PDF], Ford appears to have been absent that day, but Del Grande \u2013 and indeed most of council\u2019s rightists \u2013 voted in support of this approach, with Scarborough\u2019s best-known accountant even successfully moving an amendment designed to create more transparency in the capital budget.<\/p>\n<p>Political expediency and the structural deficit trumped Miller\u2019s attempts to prove he wasn\u2019t just another free-spending lefty. Indeed, the previous council\u2019s reliance on reserve funds draws combined with previous-year surpluses to make up budgetary shortfalls grew steadily and finally crested in 2008 ($282 million) before dipping somewhat in 2009 as part of a strategy to replenish those rainy day funds.<\/p>\n<p>This year, the previous-year surplus and the \u201con-time\u201d reserve draw (sic) in the budget add up to an impressive $307 million &#8212; $25 million more than in 2008, when the right was really squawking about such horrors.<\/p>\n<p>If Ford and Del Grande genuinely had the gumption to adhere to the city\u2019s extant policies, especially those few that actually seek to impose some fiscal discipline on council, they could have parked at least $200 million into a capital reserve fund, to be spent on, say, subways, or roads or other civic goodies.<\/p>\n<p>As it happens, the City of Toronto per capita reserve level is \u201cmuch lower\u201d than the average of the other municipalities in the GTA ($1023 compared to $2173),<a href=\"http:\/\/www.toronto.ca\/finance\/pdf\/2009fr.pdf\"> according to the city\u2019s 2009 financial statements<\/a> [PDF], which went on to warn, \u201cThese one-time draws have somewhat limited the City\u2019s future financial flexibility in responding to risk and adverse circumstances.\u201d<\/p>\n<p>Was definitely true in 2009. Still true today.<\/p>\n<p><a href=\"http:\/\/www.flickr.com\/photos\/aged_accozzaglia\/2816258213\/\"><em>photo by ageing accozzaglia<\/em><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>An eagle-eyed Spacing reader wrote this week to point out that Mayor Rob Ford and his chief bean counter Mike Del Grande are relying on a $25 million draw against the city\u2019s reserves to help balance the 2011 budget with no property tax increase. Anyone who\u2019s hung around the giant clam in recent years knows<a href=\"https:\/\/spacing.ca\/toronto\/2011\/01\/17\/lorinc-even-the-right-will-raid-the-reserves\/\">Continue reading <span class=\"sr-only\">&#8220;LORINC: Even the right will raid the reserves&#8221;<\/span><\/a><\/p>\n","protected":false},"author":4051,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ngg_post_thumbnail":0,"_ef_editorial_meta_paragraph_assignment":"","_ef_editorial_meta_date_first-draft-date":"","_ef_editorial_meta_checkbox_needs-photo":"","_ef_editorial_meta_number_word-count":"","footnotes":""},"categories":[2],"tags":[16895,7261,2211,14625,425,949,14655,426,1435,416,13672,227,89,1316,19,391],"class_list":["post-17277","post","type-post","status-publish","format-standard","hentry","category-politics","tag-capital-financing-reserve-fund","tag-accountant","tag-chief","tag-chief-financial-officer-and-treasurer","tag-david-miller","tag-doug-holyday","tag-harman-on-time-radio","tag-mayor","tag-mike-del-grande","tag-pdf","tag-responsible-government-group","tag-rob-ford","tag-scarborough","tag-the-national-post","tag-toronto","tag-usd"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>LORINC: Even the right will raid the reserves  - Spacing Toronto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spacing.ca\/toronto\/2011\/01\/17\/lorinc-even-the-right-will-raid-the-reserves\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"LORINC: Even the right will raid the reserves  - Spacing Toronto\" \/>\n<meta property=\"og:description\" content=\"An eagle-eyed Spacing reader wrote this week to point out that Mayor Rob Ford and his chief bean counter Mike Del Grande are relying on a $25 million draw against the city\u2019s reserves to help balance the 2011 budget with no property tax increase. 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