The TTC presented its Capital Budget at last Wednesday’s Commission Meeting, and included a few surprises.  Before I go into the details, a few general observations:

• Through judicious project deferals, the TTC has managed to keep its annual funding request down to a level within the City’s spending target, but this is getting harder and harder to sustain.  There is only so much work we can push off into future years and it’s all starting to pile up.
• The budget assumes a considerable contribution from other levels of government who may not be predisposed to meeting the TTC’s request.
• The scale of the TTC’s budget is quite large and its impact on the need for Provincial funding is substantial over and above whatever might be done under the MoveOntario2020 program.
• Detailed costs for projects are shown over a five-year span, but many of these extend well beyond 2013.

In the material that follows, I have converted some of the presentation to plain text and left other parts as scanned images to keep the total size down.  My own comments are interspersed with the TTC presentation and they are in italics.

TTC CAPITAL PROGRAM OVERVIEW

BASE PROGRAM (SOGR)
$4.7 Billion expenditures for 5 years 2009-2013
$3.9 Billion estimated funding available
$0.8 Billion funding shortfall

SPADINA SUBWAY EXTENSION
$2.6 Billion estimated final cost
> Full funding identified with Feds/Prov/Tor/York
> Federal contribution agreement pending

BELOW THE LINE:

TRANSIT CITY PLANS
$10.1 Billion estimated final cost
> Only EA funding identified

OTHER MOVEONTARIO 2020
$3.6 Billion estimated final cost
> No funding confirmed

OTHER TTC / WATERFRONT
$1.2 Billion estimated final cost
> Only Union Station Platform funding identified

In TTC budget parlance, “Below the line” refers to projects that do not yet have funding approval.  This part of the budget has been getting fatter every year while the TTC hopes to wake up one day with a very large gift from the Tooth Fairy under its pillow.  A major problem here, as we will see in later sections, is the assumption of Federal funding for one third of future projects.  In fact, Ottawa has no intention of making any ongoing contributions and what they do give us is targeted to specific projects with some sort of political payback rather than to general capital programs.

The Base Capital Program Envelope Comparisons show some of the shuffling that goes on.  Note the circled figures on the chart.  In 2008, the TTC underspent on several projects and has City approval to carry forward $168-million into 2009.  Due to additional deferals in 2009, the base program for that year is also below original projections.  The net effect is that expected 2009 spending stays the same.  On a five and ten year forward basis there is a small increase, but it is hard to tell how much the effect is due to real savings, project cancellations, or schedules that stretch beyond 2017 and therefore don’t show up in this projection.

The table and chart showing spending by major category indicates that 85% of total spending is on State of Good Repair (SOGR).  In effect, just keeping the system running is soaking up most of the funding, and some of that is not even confirmed.

The next chart subdivides spending by area.  The Infrastructure Expenditures shows everything except Vehicles which appear on the next page.

In the vehicle expenditures we see good examples of how the five-year budget doesn’t show the full extent of some project costs with items such as the 204 new streetcars still incomplete.

The proposed budget is reduced by $50 million on the presumption that the TTC historically doesn’t spend all it asks for except on vehicle procurement contracts.  10% of the non-vehicle budget is deducted from the request to the City on the assumption that it is not actually going to be needed.

The proposed base capital program subdivides the 2009 total slightly differently from what went before but otherwise comes to the same total.

The amendments include mainly requests for Energy Conservation projects by the Commission.  It is dubious whether all of these will actually produce savings that are cost effective, and those that don’t make the grade do not proceed.  This is mainly a placeholder line in the budget.  (A separate report on some of these projects was also on the last agenda.)

BASE CAPITAL PROGRAM KEY ISSUES

BUS FLEET & FACILITIES

• Fully accessible by 2010
• Purchase 370 buses (2009-2013); 410 (2009-2018)
• Included reduction impacts on bus fleet of new lines constructed (-305 in 2009-2018): TCP / M02020/ Waterfront
• Mount Dennis opening Nov 2008
• Next bus facility (McNicoll) cancelled on basis of new LRT line construction 

Note the impact that Transit City will have on bus fleet requirements to the point that Mount Dennis will be the last new garage opened for the foreseeable future.

STREETCAR FLEET PLANS

• Purchase 204 fully accessible articulated low floor LRVs with delivery of 24 by 2012 and 36/yr in 2013-2017 ($1.25 billion)
  – Tender Canc/Negot: Fall Award: Funding not secured
• Mid-Life ALRV & 132 CLRV Overhaul only
• Opportunity for option orders to address vehicle requirements for LRT expansion plans and growth (TCP, M02020, Waterfront)
• Existing facility modifications required ($57 million)
• Replacement Mtce & Storage Facility required by 2012 ($345 million)

Streetcar plans include overhauls of 132 of the CLRVs which need to remain operational long enough for the new cars to arrive and to accommodate growth in the demand on and extent of the system.  The value of the land at Roncesvalles and Russell Carhouses will not be available as an offset to other projects until most if not all of the current high-floor fleet is retired although it would make sense to cut back to a single “high-floor” carhouse when possible.

SRT UPGRADE & EXPANSION

• SRT Conversion by 2014 ($254 million)
• Purchase 36 Mark II SRT Cars ($221 million)
• Procurement to coincide with structural work
• Addresses growth requirements until next order in 2030
• Potential tie in to M02020 Scarborough RT Extension to Sheppard ($924 million) & 54 Expansion cars ($316 million)

The grand total cost of the SRT upgrade and extension is now $1.7-billion.  This shows the folly of retaining the RT technology.  The TTC concocted a rationale showing that the RT retention was cost effective versus LRT, but this only works if we never extend the line.  A further argument about problems with LRT capacity on the section from STC south to Kennedy essential claimed that the TTC is incapable of managing blended services.  In brief “we’re incompetent, so we need to spend a billion to makeup for it”. 

What is really going on, I believe, is an attempt to keep the RT technology alive for an Eglinton option, possibly a private sector partnership on a design-build-operate basis.

If we move away from RT, the costs go down, and the artificial funding problem of a massively expensive Malvern to Pearson route is much less pressing.  This will be a major issue for debate when the Metrolinx RTP comes out.

NEW SUBWAY TRAINS

• 234 Toronto Rocket cars delivered 2009-2011 (90 by 2010; 144 in 2011) ($692 million)
• Wilson Facility Modifications required for delivery of new TR Cars ($98 million)
• Replacement of 126 H6 Cars in 2012 under option price will address:
  – Capacity / ATC; reliability; safety; ride quality; fleet efficiency

YUS AUTOMATIC TRAIN CONTROL

• Addresses SOGR re-signalling requirements
• Provides significant capacity increase on YUS line by 2017 ($342 million)
• Capacity increase required prior to extension of Yonge North Subway Extension to York Region and growth impacts of other LRT plans
• Addresses technology requirements for new TR subway trains on YUS Line

The claimed upgrade to YUS capacity requires many things, some of which don’t appear in this budget.  They include the 7th car option, changes in terminal operations (and possibly crew management practices), and capacity upgrades at various stations to handle the additional pedestrian flows.  Nothing has been said about how the BD subway would absorb passengers arriving at a much higher rate at the Yonge and St. George transfer stations.

WHEEL-TRANS VEHICLES

• Negotiations underway for delivery of 198 new vehicles commencing in 2009
• 147 replace/ 51 growth over 2009-2014
• Canadian Content to be resolved
• Increased ELF overhauls to address extended life requirements

FARE RELATED ISSUES

GTA FARECARD PROJECT

• S140M PROJECT INCLUDED IN BASE
• BELOW THE LINE PROJECT FOR REMAINING SCOPE AT $225M INCLUDING NEW FAREBOXES IN 2012/2013 ($61M) a ESCALATED COSTS

FARE VALIDATION RETROFIT OF EXISTING FAREBOXES IN 2009/10

ELIMINATION OF ADULT TICKETS INCLUDES:

• NEW TOKENS, FARE PROCESSING, STRUCTURE AND VEHICLE REQUIREMENTS

TOKEN & PASS VENDING, COLLECTOR BOOTH & FACILITY MODIFICATIONS

The GTA farecard project is now estimated at a staggering $365-million just for the TTC.  This entire project needs to be seriously re-examined to determine where the costs lie and whether it is artifically complex or simply ruinously expensive.  Either way, it’s a lot of money to spend to get rid of the Steeles Avenue fare boundary, and a simpler, cheaper solution for GTA fare collection is badly needed.

This is a huge shopping list, and in the second part of this article, I will look at the funding problems.