The City of Toronto has built up a financial cushion of $275 million that can be used to help balance the 2011 operating budget, Mayor David Miller announced Thursday.

“The outgoing administration has handed the incoming administration a big gift,” said Coun. Joe Mihevc, a member of Miller’s budget team.

When the $9.2-billion operating budget for this year was approved last spring, councillors were told to expect a $503-million opening shortfall in 2011 that would have to be whittled down to zero.

The announcement of a big surplus makes that job easier, leaving about $228 million to be found, Mihevc said.

“It will still require a lot of work to balance the books, but the city’s moving in the right direction,” he said.

The city had a $276-million surplus at the end of 2009, which helped to balance the books along with a 2.9 per cent increase in residential property taxes.

In previous years, the surplus has come in at less than $100 million.

“Certainly any surplus is good news, but you have to wonder, where is this money coming from and why didn’t we know about it before?” said Coun. Doug Holyday.

“It always seem to me these rabbits are coming out of hats. I don’t understand how we can be running the city properly with so much information not coming out in a timely way.”