City council's 11-member de facto opposition summoned the media to a press conference at 12:30 p.m. today to present their critique of Toronto's proposed 2010 operating budget. They handed out a news release headlined Budget 2010 -- Things are not as they appear, in which they claimed to have found the smoking gun that proved Mayor David Miller was playing fast and loose with the numbers when he unveiled a surprise $100-million-plus surplus at an over-hyped news conference last month. A few hours later, Mayoral candidate Rocco Rossi issued his own press release embracing the RGG's position.
So what was the smoking gun? Strap yourself in for a weird tale that ends with no weapon and no smoke, expect for that blown by the RGG.
Here's the key excerpt from the RGG's release:
One component of the additional surplus was explained to be a $20-million 'special dividend' from the Toronto Parking Authority. The truth is, that the Parking Authority hand-delivered that $20-million cheque to the City Treasurer on March 25, 2009. Why were these funds hidden from council and the taxpayers for almost a year? Why did the February 16 budget announcement not include a lower tax hike when the existence of these funds was already known at the highest levels of the city administration? "What else has been hidden from taxpayers? Can we trust what we have read or been told? questioned Councillor Case Ootes.
The full text of the release isn't available on the RGG's new website, also unveiled today. But the RGG appended a copy of the letter that accompanied the cheque from the Toronto Parking Authority. It was indeed dated March 25, 2009.
After four of the group's members -- Case Ootes, Peter Milczyn, David Shiner and Brian Ashton -- delivered prepared statements, they opened the floor to questions. Here's the first question, directed to Mr. Milczyn:
Q: What's your source on the fact that this $20-million from the parking authority was included in the $100-million-and-change surplus? How do you know it's included in that dollar amount?
Mr. Milczyn: I asked the treasurer the source of the $100-million surprise and he ran down the list of a number of items. One of the items he had indicated was a special dividend of $20-million as a result of some favourable real-estate transactions that the Toronto Parking Authority had that brought in money that was somewhat unexpected to them. So I contacted the president of the Toronto Parking Authority Mr. Gwyn Thomas and asked him when and how did this $20-million come up. He explained it and he said to me, 'Would you like a copy of the paperwork?' And he sent me a copy of the transmittal letter dated March 25, 2009.
Straightforward enough. But other reporters followed up just to be sure. Is there any room for confusion here? In your mind there's no doubt? they asked. Mr. Milczyn said he was positive that's what Treasurer Cam Weldon had told him during a public, videotaped meeting on the budget.
Off the media horde schlepped to see Budget Chief Shelley Carroll. By way of background, when Ms. Carroll and the mayor unveiled their proposed budget on Feb. 16, it included a $250-million surplus for 2009. It wasn't until March 10, when the mayor held his much-ridiculed "important announcement" press conference that the additional $100-million was revealed. That day, a budget committee report was also released explaining the surplus -- the total $350-million surplus. The report didn't separate the $100-million from the $250-million and we've been trying for weeks to get a more accurate accounting of the $100-million. (City spokesman Kevin Sack still didn't have much of an answer today.)
Ms. Carroll recalled the $20-million TPA dividend appearing in a variance report -- a regular update on the difference between budget projections and actual results -- but she couldn't be certain. Less than two minutes of scrolling through 2009 budget reports turned up this on the first page of the variance report for the first nine months of 2009: Projections also indicate that Corporate Accounts will recognize a favourable variance attributed to a one-time contribution of $20-million in parking revenue by the Toronto Parking Authority.
There it was, the money the RGG accused the mayor of hiding, smack on the first page of a publicly available report to a committee meeting any councillor, or member of the public for that matter, is free to attend. The $20-million was part of the $250-million reported at budget launch, not the surprise $100-million. It took two minutes of screwing around on the web to find it.
Shown a copy of the variance report, Mr. Milczyn said: "I did check the first and second quarter variance reports because it [the $20-million from TPA] did come in in the first quarter. I did not check the third quarter, I admit that ... I'm checking the DVD, or my staff is, we can show it to you. If I'm wrong, if he [Mr. Weldon]didn't say what I know he said, then I will apologize to him and to everybody else. I know what I heard."
So let's go to the tape then, shall we? I watched the excerpt of the March 12 meeting at which Mr. Milczyn asked the question around which all of this pivots with Mr. Milczyn and his executive assistant in their office. Here's the transcript:
Mr. Milczyn: I've got a couple of questions. The first one that struck me was, um, the $20-million special dividend from the parking authority related to their capital financing requirements. I look at the 10-year capital plan it's in the range of $250-million so how is it that they have $20-million lying around that they don't need to apply to a $250-million plan? (Keep in mind he's referring here to the TPA's $250-million capital plan, not the $250-million surplus.)
Mr. Weldon: The parking authority and the city have a revenue sharing agreement. The city gets 75 per cent of their profits, the TPA retains 25 per cent. Every year we sit down with the TPA and we go through their capital plan. They have cash reserves on hand. And, uh, they periodically have special sales of air rights that generate extraordinary or unexpected sources of income during the year. So in this case they had a sale and when we looked at their capital plan -- and they agreed that they had $20-million they didn't need that they could return to the city.
If anyone out there can figure out how either this question or this answer relate to whether the $20-million special dividend was part of the $100-million super surplus, feel free to e-mail and enlighten me. Mr. Milczyn couldn't explain it. Usually one of the brightest and most reasonable members of the unofficial opposition, the Etobicoke councillor made a mistake.
Mr. Miller's reign is nearly over. One of the problems with his tenure has been the dearth of a smart, well-organized opposition to shine a light on the failings of council's left-leaning majority. When the RGG formed last year it seemed the right-of-centre minority had finally gotten its act together. But the group has made barely a peep for months and now it returns with this? It's unfortunate the Responsible Government Group had undermined their credibility with such a silly error.