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mel lastman can be none too happy with the provincial auditor’s recent report to the Ontario Legislature. In fact, the document should have the mayor sweating bullets.Oh sure, Erik Peters confirmed what most folks hereabouts have long suspected: the amalgamation Premier Mike Harris and his Tory horde forced upon six former Metro municipalities four years ago was not the “revenue-neutral” miracle they had promised.
“I always said we were getting killed, we were getting murdered, we were getting slaughtered with this,” Lastman said yet again of the exercise that saw Toronto take over full funding of transit, public housing and public health in return for the province’s assuming complete responsibility for education.
To hear His Washup tell it, the controversial download has hit the city with $276 million in extra costs every year since the merger, and there will be more of the same in 2002, unless the Tories agree to underwrite another big chunk of the city’s operating budget.
Alas, the provincial auditor’s abacus came up with a radically different sum than the one Lastman’s been tossing around. According to Peters’s calculations, the net cost of amalgamation to the megacity was $140 million over three years. Or something less than $47 million per annum.
Now, before anyone suggests the auditor is simply painting a picture that won’t portray his political bosses in an unflattering light, it should be noted that the rest of Peters’s report did not go easy on the provincial government. He raised critical concerns about food safety in Ontario and red-flagged serious deficiencies in many other areas over which the Tories have jurisdiction. It was hardly a document designed to make the Harris government look good.
Ironically, on the same day Peters was making his findings public at Queen’s Park, Toronto council’s audit committee met behind closed doors at City Hall, trying to get a handle on some of the profligate spending that’s been going on there in recent years.
“Stunning,” “shocking” and “almost criminal” were a few of the phrases that came out of the mouths of councillors made privy to the information during almost four hours of deliberations. So potentially explosive was some of the stuff, the politicians refused to give details.
But the fact that the city spent $257 million on outside consultants during those three years (and paid some of those consultants oodles more than they were contracted for, without supporting documentation) was cause enough for the committee to order a forensic audit of the shenanigans.
The committee should be concerned that while Lastman was screaming blue murder about getting shafted by Queen’s Park, city taxpayers’ money was being squandered in amounts far exceeding Toronto’s due from provincial coffers, according to Peters’s figures.
“I agree we’ve been shortchanged because of a negative Conservative government bias against the city,” says Jane Pitfield, councillor for Ward 26 (Don Valley West) and a vocal member of the budget committee. But the roots of Toronto’s financial difficulty, she’s quick to add, can be found at City Hall.
“Blaming the province for everything blew our credibility,” she says. “The strategy didn’t work. You can’t bully and shove people into giving money if you don’t have your own act together. It made us look incompetent.”
The political concern right now is that incompetence may be the least of the city’s problems. There’s a growing consensus that heads should roll once a forensic audit determines how at least five major consulting contracts ballooned out of control. However, most of the senior bureaucrats with supposed responsibility for such matters left the civic administration during the past year.
One of the first to go was Wanda Liczyk, the former city treasurer and a long-time administrative protégé of Lastman. The two have been together since Mel was running the old city of North York.
Insiders say Liczyk was given a free hand by the mayor’s office to do pretty much as she pleased on the financial front — as long as Lastman had money when he needed it for his pet projects. The arrangement worked just fine in North York. But when the template was applied to the new city of Toronto, things began to go awry.
Indeed, many observers contend that the mayor’s tight relationship with his chief financial officer was a major contributor to the breakdown in communications between Lastman and Mike Garrett, the former chief administrative officer, who was paid $500,000 to leave the city’s employ earlier this year.
“He had an impossible job,” said one well-placed source. “If Wanda didn’t like his initiatives, she’d just run to the mayor and, more often than not, that would be the end of it. Never mind that Michael was supposed to be her boss.”
The fact that Liczyk left City Hall for the big-bucks job of senior vice-president at Toronto Hydro may make it more difficult for Jeffrey Griffiths, the city’s auditor, to get to the bottom of the outrageous consultancy affair. And it doesn’t help that several of the former treasurer’s key underlings have also moved on to greener corporate pastures.
But Bas Balkissoon, the Ward 41 (Scarborough-Rouge River) councillor who chairs the audit committee, has made it clear that he believes Griffiths can get to the bottom of things. This, in spite of pressure the mayor’s office originally put on the committee to deep-six the whole exercise.
In the end, it may well be Lastman who ends up wearing the sorry mess. Attrition has cleared the decks of key players with intimate knowledge of how megacity budgets were prepared.
From a purely budgetary perspective, the forensic audit may be an unfortunate case of closing the gate on the pigpen after the well-fed swine are long gone. The way Jane Pitfield sees it, the hundreds of millions the city spent on consultants alone could have helped alleviate the financial pressure council succumbed to last spring.
“Did we need a 5-per-cent property tax increase this year? I’d say, no,” she argues.
Pitfield maintains that the city should have had enough of a surplus “even to look after extraordinary projects” like community swimming pools in local schools.
Now, fancy that.
Don Wanagas
City Hall
