Efforts to save taxpayer money by not filling vacant jobs at city hall appear to be taking a toll on Toronto’s services.

The city’s top bureaucrat, city manager Joe Pennachetti, says the city is particularly short-staffed in the key areas of urban planning, public health and information technology.

Overall, the city had 2,542 vacant positions as of June 30, for a vacancy rate of 4.9 per cent. In the past, only about 3 per cent of city jobs have been vacant at any one time.

“In some divisions, it is high,” Pennachetti acknowledged, speaking of the vacancy rate after councillors discussed staffing levels at the budget committee Tuesday.

Critics of Mayor Rob Ford’s administration say hiring freezes and slowdowns have been used as a way of keeping spending in check, but service delivery has suffered.

“It’s a chronic problem,” Councillor Gord Perks, who is not on the budget committee, said Tuesday. “It’s short-changing the public, its makes a sham of our budget process and it’s a failure of governance.”

The information technology division had 506 staff at the end of 2012, but the complement should be increased to 577 employees, according to city documents.

City planning and public health say they expect to underspend their 2013 budgets primarily by not filling vacancies.

Councillors have long complained that planning files have languished due to lack of staff, but Pennachetti disagreed that services were endangered.

“We still are delivering the services,” he said. “There are some areas where we have challenges in hiring, and we’re addressing those.”

The city could face a slew of vacancies in coming years as baby boom workers retire, warned human resources director Bruce Anderson. By 2015, some 40 per cent of civic workers will be eligible to retire on unreduced pensions.

At Perks’s behest, Pennachetti will report next month on a strategy to fill vacancies faster.

Pennachetti said Tuesday he is already in the process of adding staff in human resources to speed up the pace of hiring.

“I’m doing everything I can to mitigate the vacancies that we have,” he told the committee. “I believe by year end or early next year, we’ll be virtually back to staffing levels that we all want.”

The city has had large year-end surpluses in recent years, thanks to both lower expenses and higher revenues than expected. The 2013 surplus is currently projected to be $58.5 million but could grow to as much as $100 million by year end.

“Much of the surplus is built on the city not filling vacancies, which in our view is a service cut,” said Tim Maguire, president of CUPE Local 79 representing city inside workers.

Perks said that while city council sets the level of services it wants every year, hiring freezes mean there may not be staff available to deliver the services.

Perks convinced budget committee members to agree to a motion asking Pennachetti to report to the Oct. 2 budget committee meeting “on actions taken and planned actions for ensuring that staff vacancies do not go unfilled for long periods.”

Councillor Frank Di Giorgio, chair of budget committee, tabled a successful motion asking departments to guard against overspending their 2013 budget.

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“The message there is we have to remain disciplined,” Di Giorgio said. “Everybody is to make efforts to meet their budgets for 2013, because we’re relying on it.”

Di Giorgio confirmed his motion applies to all city departments and agencies, including the Toronto police, who represent the biggest single budget item.

“It’s intended to apply to everybody,” he said. “The moment we let anybody off the hook, it basically kills the message.”