Toronto’s budget chief Mike Del Grande says efforts to trim the fat have paid off with the city posting a $285 million-surplus Monday, about $130 million higher than expected! (any ideas what we should do with it?)

Del Grande says the budget surplus is between $284 million and $285 million. That figure was pegged at $154 million going into budget deliberations last January.

The city gained an extra $21 million from “G20 monies,” Del Grande said, that weren’t originally recorded as revenue in the budget. He said another $16 million to $19 million was found at the TTC.

“Everything else came in in twos and fours and fives [of millions of dollars],” he said.

Del Grande said 75 per cent of the surplus will be used to pay for the new streetcars the city has on order and the remaining 25 per cent will be put into a “rainy day” reserve fund.

While the budget chief says the surplus shows the city is getting back on track financially, he said there are still fiscal issues to deal with.

“First we still have the fundamentals that we have to have our revenues equal our expenses on the operating side – that’s still not accomplished yet,” he said.

The city is also still facing a $700 million-shortfall on its capital budget, which has prompted study on selling municipal assets, including Enwave.

“The bottom line is: let’s not just go and blow all of the money. Let’s be responsible, let’s be deliberate, let’s be thoughtful and let’s put it towards our priorities,” Coun. Josh Matlow said on the weekend.

After his weigh-in on Monday, Mayor Rob Ford said the surplus is due to city staff “tightening the ship.”

“The tax-and-spend mentality of the previous administration is over,” he said.

Former mayor David Miller left a $367 million-surplus, but Ford said he’s left to “clean up the mess” of an unpaid order for the new streetcars.

The mayor also said he’s looking at cutting the land transfer tax, but couldn’t give a date on when that would happen.

“Right now it’s too early to say,” Ford said.

Last week, Del Grande pitched a two-year wage freeze for the city’s top earners and he said TTC CEO Andy Byford was among the first to volunteer.

So, where do you think the surplus should be spent? Or should we just ‘bank’ all of it, for a rainy day…?