When Coun. Mike Del Grande poured over the city's 2006 annual financial report last week, he discovered to his surprise that Toronto 's population has increased a mere 0.4% since 2002.

Notwithstanding that, the report and its five-year fiscal review showed the Scarborough chartered accountant just how much city spending and its debt has jumped during the same period.

According to the report, the city's total wage bill increased 24% from $3.1 billion to $3.8 billion last year.

The city is paying 82% more interest on long-term debt (raised for capital projects) -- $202 million vs. $110 million in 2002. The interest payments come out of the operating budget, despite Mayor David Miller's nonsensical contentions that cancelling capital projects will have no impact on the city's deficit woes. The report says debt charges are now the second largest component of the city's property tax bill.

It's enough to make one see red, especially given the repeated assertions by Miller, his cabal of like-minded seals and their left-wing media mouthpieces that the city is not fat and there is no other option but to approve two controversial City of Toronto Act taxes at next week's council meeting.

I'd had enough of the spin. So last week Del Grande and I spent two days looking for savings and our own revenue tools to replace the $356 million anticipated from the new land transfer and vehicle ownership taxes.

We found some $440.9 million -- $419.4 million from what I've called the Big Ticket Items like wages and benefits. There was another $21.5 million from what the socialists like to call "chicken feed" -- the small yet symbolic cuts to councillor office budgets, their wage hikes and free food, the city's grants, special events, cultural and plant watering budgets that Coun. Rob Ford raises year after year.

I believe we barely scratched the surface. We deliberately avoided the city's generous union contracts, which come up for renewal next April. The mayor should be talking concessions but won't given his close ties to CUPE.

Nevertheless, here's how we arrived at the $419 million:

4 NOT-SO-FAIR WAGES: The fair wage policy -- which demands all companies wanting to do business with the city pay close to union wages -- is one of the biggest areas to crack. The city's own reports show that at $42.58/hr., Toronto 's average "fair" wage is $15 above the provincial average and $8 above Oshawa 's. Based on a figure of $1 billion for city contracts requiring the fair wage, we lowered the average rate by a conservative $5 for savings of $123 million.

4 NOTE THIS: Eagle-eyed Del Grande discovered a note in the report that Toronto Hydro will repay its $980-million loan from the city starting with $245 million on Dec. 31. CFO Joe Pennachetti told me the money will be put in a Strategic Infrastructure Fund to pay for the waterfront, the Spadina subway and environmental projects. It seems about $90 million of that will be used to fund the mayor's pet Climate Change Initiatives, like a $42-million energy conservation fund and a $20-million Green Energy fund -- shameless, given that he opted to delay opening hockey rinks until January and to close community centres on Mondays. I took the $90 million to help plug the deficit hole. True, it's a one-time fix, but Miller already set that precedent by selling off $60 million in hydro poles in 2005 to balance the books.

4 WAGES? TAKE A HIKE: It was generous enough that the city handed its 47,000 unionized employees a 3.25% wage hike last year. But according to the report, the wage bill increased 5.5% to account for merit pay and overtime. We knocked off that extra 2.25% for a savings of $86 million. Using the same figures, we also implemented a wage freeze for all of the city's non-unionized employees (about 20% of the workforce) for a savings of $18.9 million and cut their generous benefits (about 25% of the wage bill) by 4% for another $7.8 million in savings.

4 TAXES? A NECESSARY TOOL: We figure Premier Dalton McGuinty will make good on his promise to upload $38 million in social service costs next year. We opted to share the pain and raise property taxes by 6% for an extra $33 million. We also assumed there'd be $20 million in assessment growth from the rash of new condo developments across the city.

4 DEBT WASTE: Council's recent decision to purchase $54 million in new recycling and residual waste carts next year makes Waste Diversion Toronto's Rod Muir bristle. He thinks it's evidence of "Miller in Microcosm ... spending on stuff that seems to benefit city workers more than anything." We axed the $54-million proposal, which will be debt financed at around 5%, for a savings of $2.7 million in interest costs and went with Muir's suggestion to use bag tags (at 15 cents each) instead.

Del Grande challenges Miller & Co. to take a look at these cuts before he goes to taxpayers for more tax money -- that this proves the city is not as efficient as the mayor and his media mouthpieces constantly maintain.

"It's like an onion ... you have to continually peel," he said. "You have to look under the numbers and question the numbers."

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PLUGGING THE CITY'S DEFICIT HOLE

BIG TICKET ITEMS

1. Reduce city's average fair wage rate of $42.50/hr. on $1 billion of contracted-out services by $5 to bring it more in line with province and other GTA cities.

SAVINGS: $123 million

2. Use $90 million of $245-million Toronto Hydro note, which comes due Dec. 31 and will be allocated to mayor's Climate Change Initiatives.

REVENUE FIX: $90 million

3. Eliminate 2% wage hikes for merit and OT over and above the 3.25% negotiated (2006) increase contained in the $3.8-billion wage budget for last year.

SAVINGS: $86 million

4. Implement a wage freeze for city's non-unionized staff (about 20% of the total head count).

SAVINGS: $18.9 million

5. Cut non-unionized benefits by 4% (from 25%).

SAVINGS: $7.8 million

6. Provincial upload committed by Premier in election.

REVENUE FIX: $38 million

7. Raise property taxes 6% to spread the pain (3% more than expected).

REVENUE FIX: $33 million

8. New assessment on 10,000 condo units coming on stream in 2008.

REVENUE FIX: $20 million

9. Cancel $54-million capital purchase of garbage carts and bins and use bag tags (at 15 cents each) instead. Savings would be on debt financed at 5%.

SAVINGS: $2.7 million

TOTAL BIG-TICKET ITEMS: $419.4 million

THE CHICKEN FEED CATEGORY

1. Reduce councillor office budgets by $23,100 to $30,000.

SAVINGS: $1 million

2. Roll back wage hikes given to councillors and the mayor in 2007 (over standard 1.9% COLA increase).

SAVINGS: $284,740

3. Cut council's free food and coffee.

SAVINGS: $80,000

4. Cut council conference and travel budget.

SAVINGS: $50,000

5. Cut council grants budget by 10%.

SAVINGS: $4.1 million

6. Cut Tenant Defence fund grants by 10%.

SAVINGS: $6,700

7. Cut culture and special events budgets by 10%.

SAVINGS: $2.1 million

8. Cut plant watering service in city buildings.

SAVINGS: $77,000

9. Eliminate Toronto Water radio ad campaign Re: Summer lawn watering.

SAVINGS: $210,000

10. Eliminate door-to-door waste and water newsletters.

SAVINGS: $665,000

11. Cancel lobbyist registry.

SAVINGS: $400,000

12. Cut Clean and Beautiful City program (including secretariat).

SAVINGS: $1.6 million

13. Recoup half the cost ($54.50) of the 18,860 free monthly Metropasses given to TTC employees, retirees, councillors and assorted others.

REVENUE FIX: $11 million

TOTAL CHICKEN FEED: $21.5 million

GRAND TOTAL: (Ka-ching, ka-ching) $440.9 million