Update November 2:   The Analyst Notes for many areas of the Capital Budget are available online on the City’s website.  Notable by its absence is anything about the TTC, the single largest component of the entire budget.

On Monday, October 29, the City Budget Committee had its first public look at the 2008 Capital Budget.  This covers all of the programs funded by the City, of which the single largest part is the TTC Capital Budget.

We won’t know the details of what the TTC is planning for a few weeks until the Commission meeting on November 14, but we can see some outlines in the preliminary material from the City.

Toronto has a huge problem financing the TTC, and as things stand, of the $1.249-billion in new capital debt the City will raise from 2008-2012, about 80% is due to the TTC.

For 2008, the TTC’s capital funding request is in line with the City’s target, but as in past years, this is achieved partly by deferal of spending to the out-years.  This is not sustainable, particularly with major capital projects coming down the pipeline.  In the current estimates, the TTC’s capital requirement for 2009-2012 is about $420-million greater than the City’s budgetary target.

In addition to this shortfall, the TTC has an accumulated and growing backlog of capital projects that will grow to $363-million by 2012.

The table on page 18 of the Budget Presentation shows the anticipated funding sources from Queen’s Park and Ottawa.  An important line in the Provincial section is called “Long Term Funding Requirement” — this doesn’t correspond to any announced program, but it grows especially in 2012.  If you omit this line, the level of committed Provincial funding declines substantially.  The Federal section contains a similar problem with assumptions about growth in future funding.  (The problems and assumptions are restated in text format on page 19.)

The usual problem is that funding schemes at both levels are typically announced for a four or five year window, just long enough to get past the next election, but they are not entrenched.  We have to hope that something will replace them, but if nothing comes along, we are left holding the bag for future spending.

A separate Highlights Report shows major transit projects on pages 10-11.  Note that the dollar values for these projects only cover the 2008 year, not the full cost to completion.  For example, the new streetcar project will only consume an estimated $55-million next year.  Those who are following the reconstruction of the streetcar track will note that many of the listed projects are on the “non-revenue” trackage (Dufferin, Church, Richmond, McCaul, Parliament and Wellington).  The other major projects, of course, will be completion of the St. Clair line and the remaining work on Bathurst.  By late 2009, we will finally be at the end of the heroic project to bring the TTC’s streetcar network back into good condition everywhere.

One troubling aspect of the TTC’s funding needs is “scope creep” and the arrival of previously unbudgeted projects in the five year plan.  The 2008-2012 budget exceeds the City’s affordable debt target by $420-million as I mentioned earlier, but this is up considerably from the $197-million shown in last year’s budget.

We don’t yet know which projects contribute to this, and there’s probably even worse lurking in the next five year period from 2013-2017 when many large projects will be in full swing.

One obvious issue is the Yonge subway resignalling project, the move to automatic train control and service increases to build capacity on the line.  The subway car order with Bombardier signed earlier this year does not come close to providing enough cars for the entire YUS line, even without the York extension, nor for any improvement in service frequency.  If the TTC hopes to reap the benefit of the new fleet, then they will have to add a follow-on order for more “Toronto Rockets”.  The additional cars would replace the remaining “H” series fleets used on the Yonge line, and the T-1’s would all move over to Bloor-Danforth.

For the new streetcar fleet, we still do not know the price per car, and each estimate is higher than the last.  Moreover, we don’t know whether wishful thinking on specifications will run headlong into technical reality regarding both the track geometry and the overhead power system.  Any retrofits will add to the overall cost of rolling out the new cars.

For the bus fleet, current plans call for only modest growth, and even Mayor Miller’s long-promised 100 extra buses will be partly eaten up by added ridership before they actually hit the streets, now likely in fall 2008, a year later than planned.

The TTC has a long history of springing new projects and large-scale changes to existing ones because, somehow, the capital is always found to deal with these problems.  Once we see the details in the budget papers, I will likely have more to say on this subject.

The recent federal budget announcement shows quite clearly that Toronto cannot expect relief of its funding problems from Ottawa, and it’s time that both the City and Queen’s Park stopped waiting for that solution.  Yes, one or both levels will have to generate new revenue to invest in the transit system, and readers here know that my preference already lies with Queen’s Park. 

Toronto’s transit system is a regional resource and it should receive solid, sustained funding from the Province.