Build Subways! Cut Service! The Wisdom of Commissioner Li Preti

A few nights ago, Councillor Peter Li Preti, also a transit Commissioner, was on Adam Vaughan’s show on CP24 debating the merits of the York University subway with Gord Perks from the Toronto Environmental Alliance.

The line will go right through the middle of Councillor Li Preti’s ward, and he has stalwartly defended this project at the TTC.  The question came up, how do we pay for this?

Well, the TTC has a bunch of bloated, poor-performing routes, says the transit Commissioner, we’ll just have to cut service on them.  Yes, that’s right, cut service to pay for Peter’s subway.

Let’s take him at his word and see what would happen.

Charity Begins at Home

Here’s a look at the Councillor’s own ward and bus routes:

  • His ward is bounded roughly by Steeles, Jane, Sheppard and Dufferiin.  Keele and Finch West run right through the middle.  These are all trunk routes that pull their weight on the system.  We must look elsewhere for savings.
  • Other routes in the ward and their cost recoveries (according to the TTC 2005 Service Plan) are Downsview (a respectable 50%), Keele North (the bottom of the pack at 15%), Alness (29%) and York University (37%).

Hmmm … the combined daily net operating cost of Keele North and Alness is $10,300.  That’s around $3-million per year.  At that rate, we will finish the Spadina Subway in (insert sound of ancient calculator here) 500 years, give or take, without allowing for inflation.  We will free up 10 buses for service elsewhere.  Even with the TTC’s legendary rebuilding program, they will probably wear out before we manage to open the subway line.  [Imagine if Christopher Columbus brought plans for the line with him to the New World, we would have opened it by now!]

I’m not really being fair here.  Since we’re talking about operating savings, we should only expect to pay for the extra year-to-year costs of owning the subway.  Just like that spiffy new condo you live in, you’re only paying mortgage interest plus some operating expenses.

First up, of course, is interest on the debt.  Let’s see (more clicking and whirring) $1.5-billion at say 5% comes out to $75-million per year for interest charges.  The $3-million we saved in Peter’s ward isn’t quite enough, so we have to look elsewhere.

Plundering the System

To save $75-million per year, we need to save about $250,000 per day.  Let’s work our way up from the bottom of the TTC’s Poor Performers to see which lines we must sacrifice to pay for Peter’s subway.

  • 107 Keele North
  • 120 Calvington
  • 51 Leslie
  • 80 Queensway
  • 130 Middlefield
  • 192 Airport Rocket
  • 169 Huntingwood
  • 117 Alness
  • 122 Graydon Hall
  • 10 Van Horne
  • 97 Yonge
  • 167 Pharmacy North
  • 131 Nugget
  • 48 Rathburn
  • 502 Downtowner & 503 Kingston Road
  • 88 South Leaside
  • 98 Willowdale
  • 46 Martin Grove and 191 Highway 427 Rocket
  • 133 Neilson
  • 115 Silver Hills
  • 127 Davenport
  • 74 Mt. Pleasant
  • 14 Glencairn
  • 11 Bayview and 28 Davisville
  • 79 Scarlett Road
  • 8 Broadview
  • 106 York University and 196 York U Rocket [OOPS!  Cancel that busway project!]
  • 124 Sunnybrook and 162 Lawrence-Donway
  • 132 Milner
  • 53 Steeles East
  • 112 West Mail
  • 123 Shorncliffe
  • 103 Mt. Pleasant North
  • 86 Scarborough
  • 42 Cummer
  • 71 Runnymede and 77 Swansea
  • 66 Prince Edward
  • 190 Scarborough Centre Rocket
  • 26 Dupont
  • 33 Forest Hill
  • 55 Warren Park
  • 12 Kingston Road

What a shame!  It seems that many people in Toronto don’t deserve transit service by Councillor Li Preti’s formula including students at York University!  And we’re building them a subway?

Oh yes.  That subway.  We haven’t opened it yet.  We know from experience on Sheppard that we are going to lose money, but maybe not as much.  Alas the TTC riding projections for the new line do not include an estimate of net new riders and so we don’t know how much new revenue will offset the added operating expense.  Anyhow, the York U line is roughly the same length as the Sheppard Line, and we can expect an added deficit of at least $5-million (it’s more for Sheppard as we already know).

We need more money for this.  Maybe a fare increase.  Maybe more service cuts although $5-million is chicken feed beside the capital debt charges, and we only need another roughly $19,000 per day.  Back to the poor performers we go:

  • 104 Faywood
  • 96 Wilson

That will do nicely, and bring us up to a cumulative total savings of about $275,000 per day.  Of course, we will lose a few riders and I didn’t take that into account.  We will have to cut even more to stay on top of this, but I don’t want to make this even more embarrassing.

We all know perfectly well that this is an utterly unworkable proposal, but it shows us important things:

  • The capital cost of subway lines will swallow huge amounts of money in future budgets for debt service.
  • Added operating costs need more revenue.  Half of the last fare increase, by the way, paid for the extra cost of running the Sheppard subway.
  • Just because a route is crammed with riders, it’s not making tons of money the way the TTC looks at things.
  • The concept of “poor performing” routes doesn’t work very well when you get more than a little way above the bottom of the barrel.  TTC staff like to say that any methodology will identify the poorest ones and their formula is as good as any.  Heck, someone in grade 1 who barely mastered 2+2 could do that.  The problem is that when we keep going, as many politicians are wont to do, we get into deep problems with major routes.
  • In my example, I have cut all service on the routes listed in order to get the savings we need and assumed that all of the riders would find their way to other routes rather than into their cars.  If we are going to spare some service, or at least try to cram more riders on those obviously underused buses, then the route list gets much longer.

Transit planning and budgeting is not the simple exercise some of the bean counters would have us believe.  Transit riders and taxpayers are ill-served by transit Commissioners with such short-sighted views of their own system.

Postscript:  The Dirty Little Secret About TTC Cost Allocation

In case you are wondering how such well-used routes as Steeles East and Wilson are down in the basement when measured by cost recovery, you need to look at the TTC’s numbers overall rather than route by route.

Taking the data in the 2005 Service Improvements report, and adding up all of the routes, we find that there is a “cost recovery” of about 49% across the entire surface system.  But, you ask, the system has an 80% recovery rate overall — how can this be?

The short answer is that the methodology allocates an average of 71 cents per rider to surface routes.  Where does the rest of the money go?  To the subway system and the RT.  The problem here is that the subway wouldn’t have riders without the surface system feeding it.

The rapid transit network accounts for around a third of the total operating cost of the TTC, but that service is never on the chopping block.  Indeed, subway service itself is only part of the total because of the huge fixed cost of stations and infrastructure.  This means that every year when the bean counters look for savings, the axe falls disproportionately on the surface routes.

This is the folly of trying to analyze a network on a line-by-line basis for “profit and loss”.  It looks simple on paper where pages of figures hide the lack of meaningful content.

I will return to this when I write a detailed commentary on this subject in another post.