The City of Toronto posted a $70-million operating surplus in the first three months of 2012, thanks to lower spending and higher revenues from the land transfer tax and TTC fares.

“All of that is good news,” said Councillor Peter Milczyn, a member of council’s budget committee.

“It shows that the change at city hall is bearing fruit and city staff are taking the direction of looking at ways to be efficient and save money. Just because it’s budgeted for doesn’t mean you have to spend it.”

Due primarily to austerity measures such as hiring freezes, the city has reported large surpluses in recent years. The surplus for the full year 2011 came in at $292 million, most of which was allocated to purchasing streetcars.

While the city racked up $70 million from January through March, the trend isn’t likely to continue, the staff report warned. At this point, it’s estimated the final surplus for 2012 will total $90 million.

Opponents of Mayor Rob Ford’s cost-cutting program believe the full-year surplus will be much higher, based on the number of vacant positions that won’t likely be filled.

“I’m betting it will be much more than $90 million, maybe double, triple or even quadruple that figure,” said Councillor Joe Mihevc, who served on the budget committee under former mayor David Miller.

“The TTC is a prime example. We cut a whole bunch of routes during peak hours because there’s no money. Well, now there’s more money . . . there’s way more money, but they don’t want to tell you that there’s way more money.”

Mihevc said the mayor’s strategy is to dampen pressures to spend more.

“They use a low estimate as a way of saying to departments, ‘Keep your spending in check and maintain a tight hiring freeze.’ It’s basically a restraint strategy.”

The report, to be presented to Tuesday’s budget committee meeting, said the city saved $27 million due to unionized workers settling for a zero per cent wage hike in 2012.

However, the report noted that the money will be needed next year to pay a 1.5 per cent lump sum payment negotiated with the Canadian Union of Public Employees, locals 79 and 416.

Other highlights:

• The Toronto Transit Commission had a surplus of $8.1 million as of March 31 — $3.1 million due to higher ridership and $5 million due to lower fuel prices and lower heating costs due to the mild winter.

• The municipal land transfer tax brought in $17 million more than expected and is on pace to hit a total of $333 million for the full year, up $45 million from earlier projections.

• The land transfer tax boosted city coffers by $324 million in 2011, almost $100 million more than forecast.

• The parks and transportation departments both were over budget by a total of $4.4 million during the three months. Parks experienced lower ski revenues due to lack of snow and transportation had a $2.9 million drop in parking permit fees.

There is no shortage of demands for the extra money, Milczyn said, noting for example that the TTC is looking for funds to increase service on its busiest routes.

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“We have a multi-billion-dollar debt, we have billions in capital requirements that we don’t know how to pay for,” he said.

“A $70-million, three-month operating surplus sounds phenomenal and it’s great, but it’s a drop in the bucket towards repairing our roads, our water and sewer infrastructure and buying additional buses for the TTC,” Milczyn added.

“If we had a $700-million surplus, even then it wouldn’t be enough. But $70 million is good management and it means it will be easier for us to meet our obligations. It hardly means we’re swimming in cash.”