New Land Transfer Tax

[Hydrogen]

The province and the city had an opportunity a while back to really create a unique situation for Toronto. One can easily see how the present tax and revenue problems would not exist, or be alleviated considerably, had a better funding aparatus been constructed.

We will still have to wait a long while before these issues are finally ironed out. The sad thing is, here we are in the midst of a provincial election, and there is little or virtually nothing going on with respect to dealing with needs of cities.

I grow more concerned about Miller and his abilities. As a politician, he is not doing anywhere near the job necessary to get the province to listen to his message, and his message to the city is rather bleak.

 

[Ahab]

It's obvious that the mayor handled this issue badly. I'm not sure why there wasn't an election after he essentially lost the vote. We definitely need one.

It seems to me that to keep pushing for the LTT now is a bit arrogant. To initially focus on the LTT was wrong, because it targetted only one segment of the population - homebuyers. And they were asked to take on a massive tax burden. It's a tough sell, because it reeks of unfairness. The mayor's spin on it - "Oh, it's only 1% of the cost of the home" - sounded incredibly insensitive considering that buying a home is an emotional issue.

We need to forget about high minded principles and work out a practical compromise. Didn't the mayor reject a whole bunch of taxes like a liquor tax earlier in the year? We need to bring those issues back to a vote. My suggestion would be to implement taxes across the board (bring property taxes up to a level comparable the high end in the GTA, institute a liquor tax and whatever other taxes are now available to the city to impose). I think a much more modest LTT wouldn't be a problem, but I'm talking say 10% of the original proposal. In addition, he needs to look again at service cuts. If there really is a crisis, we need a solution that everyone in the city needs to be a part of. We need to spread the pain - not focus it on a particular group.

 

[rbt]

It's obvious that the mayor handled this issue badly. I'm not sure why there wasn't an election after he essentially lost the vote.

You really don't know? I certainly appreciate your honestly on that point.

Municipal rules are pretty straight forward BUT they are different than provincial and federal rules because there is NOT a party system in place. Confidence votes in financial matters do not exist as council is expected to work together to accomplish their group goals. City of Toronto Act changes that a bit with the introduction of a steering committee but they really don't have any power granted to them and all councillors have "free" votes for all votes.

Toronto, due to its size and complexity in informing constituents, probably could be moved over to a party based system. In many ways both councillors and media pretend it exists today.

Harris, when he did his massive reforms to both the City of Toronto Act and Municipal Acts could have introduced a party system into Toronto including confidence votes on financial matters.

Municipal Act: (Harris 1996 with minor kibitzing by McGuinty)
http://www.search.e-laws.gov.on.ca/...6e379/6/frame/?search=browseStatutes&context=

City of Toronto Act: (McGuinty 2006)
http://www.search.e-laws.gov.on.ca/...73a28/1/frame/?search=browseStatutes&context=

Free is in quotes above because deal-making and strong arm tactics do happen regularly.

 

[Ahab]

You really don't know? I certainly appreciate your honestly on that point.

You're right. I'm not that informed about the how we can move towards an election (and I don't think I'm alone here), but that isn't my point. I think the vast majority of Torontonians just want practical solutions to the budgetary problem and they are only hearing extreme views that are not helpful.

 

[rbt]

You're right. I'm not that informed about the how we can move towards an election (and I don't think I'm alone here), but that isn't my point. I think the vast majority of Torontonians just want practical solutions to the budgetary problem and they are only hearing extreme views that are not helpful.

Unfortunately, the time for practical solutions was with Harris and Lastman. Lastman complained (very very loudly actually) but nobody paid attention.

The end result is that the cost of implementing provincially mandated programs increases at approximately the same rate as the provinces GDP. Social services tend to do that.

Property taxes normally increase at about the inflation rate.

GDP increases are substantially higher than the inflation rate.


City staff recommended LTT be brought in this year, and you can expect, without a doubt, the other 8 taxes to be brought in over the next 2 to 3 years unless the province or feds to something significant.

Here's a fun game:

Toronto city shortfall: $550M (roughly without service or tax changes)

Toronto's share of province surplus (calculated per capita): ~$450M
Toronto's share of federal surplus (calculated per capita): ~$700M

For some reason I think a $1150M surplus should easily cover a $550M shortfall, but it doesn't. Instead we're getting a Land Transfer Tax instead.

If you calculate Toronto's share of provincial/federal surpluses based on contribution to that surplus instead of per capita, you end up with a number in closer to $2B.


Asking the province or feds to upload services is reasonable. Asking for a portion of sales or income taxes that grow at the GDP rate is reasonable. Lastman has asked for both as has Miller.

 

[nicetommy]

City still overpaying contractors

Water, roads audits cite mismanagement

From TorontoStar

Sep 25, 2007 04:30 AM
John Spears
City hall bureau

Despite repeated audit warnings, the City of Toronto hasn't learned how to avoid overpaying contractors, says auditor-general Jeff Griffiths.

"Every contract we've looked at in the past few years has resulted in an overpayment to the contractor," Griffiths told the audit committee yesterday.

Griffiths made those comments as his staff presented a review of Toronto Water that found problems both with external contractors and internal management.

Among the findings:

Estimates of what emergency work will cost are sometimes wildly out of whack. Two contracts reviewed by the auditors contained provisions for work beyond the original contract: "The estimated extra work included in bid documents for the two contracts was $350,000, while the actual extra work paid was approximately $2.5 million."

Simple math was sometimes bungled: One contractor got a $55,000 overpayment because staff erred in calculations. (Toronto Water officials say they'll recover the overpayment from money held back prior to final payment.)

When auditors checked contracts awarded during 2004, 2005 and 2006, they found the amounts paid exceeded the original contract amounts by 24 to 158 per cent.

(Toronto Water officials said that actual work was performed for the extra payments, and that it is often difficult to anticipate the scope of an emergency repair. However, the department trimmed emergency spending by 28 per cent in 2006.)

Payments for one $2 million contract awarded in August 2006 reached $5.2 million by November, auditors found.

Authorization for the extra payment wasn't obtained until the following April.

Lou Di Gironimo, general manager of Toronto Water, said his department has created a central contract management office that tightened controls and is saving the city about $5 million a year.

Griffiths said Toronto Water isn't the only city department that has mismanaged contracts. Two reviews of road contracts found similar issues, he told the Star.

"The problem in effect is supervision, management supervision," Griffiths said, citing flawed payroll systems and excessive overtime.

 

[rbt]

Over paying contracts is an issue. I expect the root of the problem is we under pay the staff who do the contract negotiations.

I know the "cheap" people I've hired turned out to be pretty expensive in the long run. Paying additional salary up-front has saved money from going elsewhere.

When management in charge of 10000 employees makes $250k/year, either they're bottom of the barrel (private industry would pay much more for the same position) or they have an immense amount of dedication to being a public servant.

If it is a result of underpaying city employees, then it is politically impossible to resolve that problem; not that private companies have spending under control. Private firms only care about expenses when margins are tight or negative.

 

[poppajojo]

Your reasoning seems kind of vague, do you think you can be more specific? $250k seems very reasonable to me for a management type position.

 

[rbt]

Your reasoning seems kind of vague, do you think you can be more specific? $250k seems very reasonable to me for a management type position.

Guess it's just my industry but I would expect to make that as a base salary for adequately managing a $20M department budget. People managing $1B budgets for the city are taking 0.025% of their budget in pay.

I don't believe in overpaying for the sake of overpaying but I think it would be a really good idea to pay a one time bonus of 10% of long-term annual savings found. Find $10M in TTC savings per year and that employee can take home a bonus of $1M at the end of the year. Savings would be based on a specific idea against last years budget + inflation + adjustments for service level changes.

 

[poppajojo]

Guess it's just my industry but I would expect to make that as a base salary for adequately managing a $20M department budget. People managing $1B budgets for the city are taking 0.025% of their budget in pay.

I don't believe in overpaying for the sake of overpaying but I think it would be a really good idea to pay a one time bonus of 10% of long-term annual savings found. Find $10M in TTC savings per year and that employee can take home a bonus of $1M at the end of the year. Savings would be based on a specific idea against last years budget + inflation + adjustments for service level changes.

That sounds really extreme (reffering to the bonus system), I thought public sector workers were already considered to be payed well,
edit- but it does sound like an interesting idea to give incentives for finding savings, maybe you have something there.

 

[unimaginative2]

Incentives for finding savings are definitely a great idea. Who knows better about inefficiencies than the people actually working there every day. Of course, what happens if the recommendation is "Fire my coworker"?

 

[Hydrogen]

On the last part, that'd never happen: that would mean more work for the person who suggested it.

 

[unimaginative2]

Haha. What about "Fire my boss"?

 

[rbt]

Incentives for finding savings are definitely a great idea. Who knows better about inefficiencies than the people actually working there every day. Of course, what happens if the recommendation is "Fire my coworker"?

If coworker is disruptive and not a net contributor for their salary, then I start with a chat and if they're still problematic we try segregation when possible, if they're still problematic then they go to the top of the layoff list. Sometimes complaints like that indicate the complainer is actually the problem and are the ones who need the chat.

Layoffs are a great way to eject 10% of the worst employees without hitting morale too hard, particularly if you followup with a retaining bonus for the rest of the staff. A retaining bonus is %age of savings from staff reduction redirected to staff with increased load -- show them you care.



I'm not entirely convinced that frontline workers in public service are paid very well either. Some are excessively paid due to union labour and minimum wage by-laws (Toronto's internal minimum wage is higher than the provinces minimum wage). Sure, TTC workers do great if they were working a 40 hour work. In reality it is a shift-work job and you can regularly get assigned days like 6am to 10am then 2pm through 6pm; followed by 12am through 8am shifts the following week.


It's pretty straight forward to me. Would I do that job for that pay scale? Normally the answer is a resounding NO after I find out what the public service job really involves.

 

[poppajojo]

As you understand, many aspects of private and public are completely different, but still public workers are considered to be paid fairly well. Here is a link for top paid salaries for the publc sector in Ontario last year: http://toronto.ctv.ca/servlet/an/local/CTVNews/20070330/sunshine_liste_070330?hub=TorontoHome

Understood, you wouldn't want to work as a ttc bus driver, regardless let's try to keep things in perspective. The pre-requirements for applying to be a bus driver and for working at a 24 hours Dominiion? The wage differences?