TTC 2008 Operating Budget & Service Overview

On November 14, the TTC gave approval in principle to the proposed 2008 Operating Budget.  A short report is available online but it is missing one critical page, the table the table giving the details of the budget by major revenue and expense area.

You can read the details in the report including a line-by-line discussion of the changes.  Overall, the TTC’s operating expenses will rise about $74.6-million or 6.8% over 2007, and this does not include provision for wage settlements in the coming contract negotiations. 

Each 1% increase in wages translates to about $8-million in annual costs, of which $6-million would affect the current budget year because the new contract will take effect on April 1, 2008.

Ridership and service will both increase in 2008, and the cost of new and improved services accounts for over one quarter of the year-to-year change ($20.9-million).

Among the other major contributions to rising operating costs are:

  • Accident claims ($7.2-million) are rising both because of changes to the legislative environment, growth in the number of no-fault claims and higher settlement costs.
  • Bus part costs ($4.6-million) are rising because newer vehicles are coming off warranty and the cost of spare parts, especially for hybrid buses, is higher than for the older diesel fleet.  This trend is expected to continue for several years as the TTC renews its fleet and changes the technology mix.  The cost of a replacement power plant for a hybrid is four to seven times higher than for a diesel.  Whether this will fall as hybrids become more common remains to be seen. 

As I mentioned in a previous article, the estimated ridership for 2007 has been cut by 10-million to correct for an overstatement of the Metropass trip multiple in the 2007 Budget.  This rather sudden adjustment raises important questions:

  • The TTC collects trip diary statistics monthly and would have known long ago if the multiple were dropping enough to affect year-end figures.  Indeed, if this value were not stable, ridership reports and projections should be adjusted regularly to reflect ongoing changes.
  • The level of assumed ridership affects projections for the budgeted amount of service, although more recently these two items seem to be decoupled (a long overdue change ever since passes came into widespread use).
  • In recent debates about appropriate fares, much was made of the unreasonable subsidy afforded to Metropass users who get “extra” rides at no cost.  Now, it seems that the number of “extra” rides they were taking is not as high as originally claimed, but they will pay a big increase in the pass price anyhow.  Did the TTC withhold information about the falling trip multiple in order to ensure that Metropass users would be seen as taking more than their share of the subsidy?

The projected ridership for 2008 is 464-million, up from a probable level of 452-million (allowing for the vanished Metropass trips).  This increase is projected to come from:

  • economic growth (14M)
  • fare media mix (more Metropass rides) (2M)
  • leap year (1M)
  • loss from the fare increase (minus 5M)

If the fare increase does not have the expected impact on riding, something that should be clear in early 2008, we will get more riders than projected.  No riding increase is assigned to the pending service improvements for no clear reason, nor is any growth assumed from a possible introduction of a U-Pass for post-secondary students.

The total TTC workforce is projected to rise from 9,835 at the end of 2007 to 10,249 by the end of 2008.  The majority of this change (378 out of 414 positions) comes from new operating staff for improved service.

Service Improvements

The big news is that the long-awaited service improvements will finally show up in 2008, although some won’t be in place until late in the year.

Mitch Stambler, TTC’s Manager of Service Planning, gave a presentation which I will precis here.  The indented text is my paraphrase of Stambler’s text.  Comments in square brackets [] are my own observations.

The TTC has suffered from overcrowding since 2005 with riding growth, but budgetary constraints.  Modest increases were implemented in September 2006, but nothing else has been added due to limits on vehicle availability and the workforce.  Major increases planned for fall 2007 were cancelled due to the City’s cost containment directive following the deferral of new taxes in July 2007.  Ridership continues to grow and overcrowding is seen on 54 routes.

Map of Deferred 2007 Service Improvements

Passengers will accept some crowding, but as it worsens this makes moving through vehicles and finding seats difficult.  Service reliability falls because of time lost to loading and unloading at stops, and there is no capacity to absorb a surge load.  This leads to delays and bunching.

The results are uncomfortable overcrowding, unreliable service and passengers left behind at stops.  All of this drives those who can to seek alternative ways to travel.

Accommodating demand on the TTC is fundamental for maintaining ridership gains won in spite of constraints, achieving ridership and revenue targets, and supporting the City objectives of reduced auto dependency, congestion, gridlock and pollution.

Customer research shows that passengers are more concerned about service than fare, and that they will pay more for better service.  Service must remain at a level that keeps crowding at acceptable levels and operates reliably.

Several years of constrained resources limit the TTC’s ability to respond to rising demand including fleet size, garage capacity, instructors and training facilities, and drivers.  [Note that Mt. Dennis Garage has not opened due to budget cuts.]

Examples of services that need improvement:

  • 29 Dufferin PM peak:  Average load is 61 riders, the standard is 57.  Three buses will be added.
  • 100 Flemingdon Park Sunday early evening:  Average load is 65 riders, the standard is 38 [seated load on a low-floor bus].  Three buses will be added.
  • 196 York University Rocket AM peak:  Average load is 61 riders, the standard is 57.  Two buses will be added.
  • 506 Carlton weekday midday:  Average load is 53 riders, the standard is 46 [seated load for a CLRV].  Three cars will added.

In 2007, strong economic growth plus the popularity of passes, especially for off-peak riding, drove up demand.  An additional 20-million riders are expected in 2008 as this trend continues.

27 additional peak buses will be added in February 2008, and 89 additional peak buses will be added under the Ridership Growth Strategy in November 2008.  [Additional changes for off-peak services were not detailed in the presentation.]

[The table below shows the additional service to be added in 2008.  All values are in vehicle hours, and are shown with the budget year impact and the full year impact.  The later an improvement is made in the year, the less the impact on the current year.]

  • Crowding improvements deferred from 2007:  210K / 238 K (effective February 2008)
  • Ridership Growth Strategy deferred from 2007:  8.7K / 87K (effective November 2008)
  • Capacity for new ridership in 2008:  143K / 219K
  • RGS off peak improvements in 2008:  35K / 303K

With these service improvements, including RGS changes so that all routes operate on the same hours as the subway system, The TTC will be there for Toronto, the Transit City.

On a full year basis, this is an increase of 847,000 vehicle hours of service.  Putting this in context, the TTC operates around 145K hours of service each week although the amount fluctuates through the year.  On a full-year basis, this is an 11% increase.

Although there are some outstanding issues to be resolved with the City Budget Committee about the final amount of the TTC’s subsidy and fine-tuning the budget, there is agreement that this proposal can go forward and that service improvements for early 2008 can proceed without waiting for the final budget approval at Council.

Crowding has finally penetrated everyone’s mind as the top issue facing the TTC.  Recently, Chair Adam Giambrone could not get on a Finch West bus, and as a daily TTC user, he sees first-hand what riders must put up with.

Listening to the debate, I could not help thinking back decades to Gordon Hurlburt, a former chair of the Commission and a member back in the days when Streetcars for Toronto got started.  One day, he arrived late for a meeting and grumpily reported that not only had he been unable to board the Sheppard East bus westbound at Leslie, he had to let several buses pass before one arrived with any space.  After a suitable interval, a staff report appeared saying that “complaints had been received” but that no evidence of overcrowing on that route could be found.  Hurlburt gave up fighting with staff.

Things have changed and it’s now acceptable to admit that service isn’t what it might be.  I hope that we will see more of this type of system growth in years to come, that transit can get ahead of the rising demand and be a truly attractive “better way” to get around the city.

12 thoughts on “TTC 2008 Operating Budget & Service Overview

  1. Thank you for assembling this important info, Mr. Munro, particularly for including the chart for easier reference. The public needs such access to information if they are to make informed decisions. God knows the media don’t always fill that role.

    I think this puts to bed the Mystery of the Disappearing Walk Left Signs, though. You can smell the insurance lawyers all over it.

    $7.2 million for accidents and insurance, with added no fault settlements? That’s over half of our exhorbitant wage increases! Outrageous!


  2. And only $2.5 million from parking? I think that the TTC’s budget shortfall would melt away if it were to start charging market rates for parking – with no drop in ridership, since the lots are overcrowded anyway and they would still be full if the TTC charged market rates.

    Steve: There is a strong faction within the TTC who think the system will collapse if they stop offering parking. I think that they’re full of it, and will be happy to see those lots disappear one by one under new buildings as proposed at Warden.


  3. Does the omission of projected wage settlements in the new contract mean that the TTC (1) doesn’t want to give away its bargaining position or (2) will allow or provoke a work stoppage that would last sufficiently long to eat up the wage settlements?

    Steve: At the political level, I don’t think a work stoppage is tolerable. There are already settlements in the municipal sector that give a pretty good idea of what everyone else will get, and it will be easy to portray the ATU as greedy if they try to go beyond the established pattern.

    It is common for the TTC not to include a specific allowance for a settlement in their budget. This time, everyone is on notice about what each percent increase in wages will cost, and anyone can do the math. The real issue will be how much the budgets in other areas, particularly fare revenue, are fudged to hide potential cost savings or unbudgeted revenue that can offset a reasonable wage increase. For example, if the loss in riding and revenue due to the fare increase is less than the predicted five percent, extra cash will start piling up rather quickly. That five percent is worth about $40-million.


  4. I have a question regarding TTC’s revenue from rent. How much real estate does TTC own that can be used as office space? Assuming the TTC is willing to give up a few lots (one at Warden for eg) to set up office towers or commercial space – will it provide for more revenue without driving away significant ridership?
    The city could also use that land to set up low-income housing. (kill two birds with one stone??) Yes, I know that NIMBYism will probably kill any such idea but it just seems pragmatic.

    Steve: The main blocks of real estate the TTC owns that can be developed are, of course, around subway stations. Some of these are in neighbourhoods where residential uses are appropriate, while others are suitable for office/commercial development. Plans already in the works are:

    Eglinton: Office development above the old bus terminal.
    Islington: Office development on part of the existing bus terminal.
    Victoria Park: Residential development over the existing bus loop and parking, with a new bus loop where the parking is now.
    Warden: Development (likely residential) on the existing north parking lot and bus terminal, with a new bus terminal where the south lot is now.

    Other sites are under consideration, but these are the main ones now in the pipeline.


  5. While the Islington one sounds like a done deal, hasn’t the Eglinton one been running into difficulties with being agreeable to a developer? I remember reading that the bus terminal conditions connected to that piece of real estate was complicating things there.

    Steve: The intent is to have the new terminal under the new development. This chomps a big piece of ground floor territory out of any building. In any event, there is an RFI process in the works to see who might be interested in developing this block. I don’t know where it stands, and those things tend to be done on a confidential basis.

    Meanwhile, Kipling is out to expand its parking GO Transit style (and no, the fact that it is a GO Train as well as TTC Subway Station does not qualify as an excuse in my opinion, especially when you look at the transfer patterns/dynamics at that station that make it somewhat unique in the network (as well as the fact that this area is nearing its realization of a transformation to a destination in its own right)), as is the York Extension parking volumes… the TTC is really trying to play both sides of the fence (urban/commuter transit agency), which I’d argue is of concern since I question the compatability of this approach with its typical model (parking expansion has never been this agressive or on thsi scale in the past). You’ve touched on this at arm’s length before, as I recall.

    Steve: With the Six Points about to go through major changes, the idea of devoting large amounts of land to parking really is contrary to many transit and city planning objectives.


  6. In response to Saurabh, everyone here who lives by Warden station, would love to see low income housing in the north lot. The primary problem is that we don’t want high density housing in the area, and I disagree.

    I would like to see mixed income housing in the densities in the range of 30 units per floor, 30-40 floors, and we could cram two buildings in the lot. In regards to the location we can rehablitate that bridge that connects the north lot to the station, and the ridership will increase because of it. Many people opposed the idea last year and I was looked at like I was on some drug. Subways are expensive and everyone here knows this, we need to build massive buildings around the stations, low income to high income. We can do so much with the lands around my “home” station it’s not even funny.

    I have to agree with Saurabh, Nimbys shoot down anything thats productive and outside the box. They are a joke and it’s interference of making progress in the grand scale of things.


  7. I am puzzled… how the TTC makes “10M (2007) rides disappear” like David Copperfield!!! Is it an optical illusion? What forecasting assumptions did they change and use with virtually no public disclosure or discussion? What is the impact on 2007 Revenue? If the average fare is still ≈$1.69… did the 2007 revenue also decline by $16.9M, or did they make an invisible adjustment to average fare that was withheld to gain approval for the TTC Fare hike in September?

    Without a detailed CGM Report to peruse… the CGM and TTC Commission have to accept Staff’s word… for an unprecedented error in ridership forecasting. Was a $9 Metropass monthly price increase really necessary (justified on the basis of “…more Metropass rides than budgeted lowering the average fare…”) as claimed just two months ago in September?”

    Vice-Chair Mihevc’s sharp questioning of Staff at the November Commission meeting showed his displeasure and should be followed up with a December public presentation of TTC Staff’s changed Metropass, rides, average fare and Metropass Monthly Diary Panel details, if confidence and transparency in the TTC’s annual budgeting is to be restored in advance of BAC and Council approval of the 2008 Operating Budget.

    The unprecedented 10M ride forecasting “blooper” begs a detailed explanation to verify TTC Staff’s basic competence in annual operating forecasting and budgeting… in advance of the huge operating funding increase needed to (finally) meet existing 2008 demand, then implement RGS to halt the decline in transit modal split (2008–2012)… and lay the groundwork for the unprecedented Transit City expansion (2012–2020) to rebuild transit’s share of trips to 25%+.


  8. In response to what Matthew Kemp just said about Warden Station and its surrounding area:

    I happen to live near Warden Station and it is my home station. I can tell you one thing, there is already housing in the area along Warden Ave i.e. Cataraqui Ave, Fir Valley Court etc… What people in the area want is housing for the middle class working man, not low income housing. I remember when the proposal came to the houses about placing 3000 affordable housing units where the north lot is now, people did not like the idea one bit and it was changed to very little affordable housing and more mid-high income houses.

    If anything should be done with the surrounding area of Warden Station as well as the station itself it should be as follows:

    The north lot should be redeveloped much like the north lot at Kennedy only with a passage leading under the bus entrance to the subway instead of over the bus entrance and into the station like it is now. (the parking is usually full on a good day and therefore should remain).

    The bus bays should be put underground like what they did at Don Mills station. This in my opinion is more attractive because the island platform at Don Mills is huge and can accept many routes into the station.

    The station itself should be torn down, subway platform, bus bays, everything and rebuilt in a more modern fashion much like Don Mills station where everything is underground and the land above can be used for other things.

    However it is done, I still say that the subway platform should remain with a tower and a crossover, in the event of turnbacks much like what currently exists at Bayview station.

    Steve: Putting Warden underground has big problems because the station is already in a small valley, complete with watercourse from the northeast to southwest quadrants of the intersection. Getting under St. Clair, and especially building the new tunnel and station while the existing one remains in operation, would be quite a challenge.

    The proposed new bus loop is an island platform in what is now the south parking lot, and so you will have the benefit of the new configuration without the expense of relocating the subway itself. The vacant lands east of the station on the Hydro corridor will become parking.


  9. With regards to the whole Warden Station situation, any idea when the construction will commence..

    Steve: I don’t think that this has even reached the stage of requests for interest in the development parcels, and there is no approved budget for the overall work. Don’t hold your breath.


  10. Hello Steve,

    Firstly, I’d like to acknowledge you. I’ve been oblivious to the time & effort you have dedicated to our city. I appreciate your passion and devotion to our community.

    I have recently given up my vehicle to reduce my expenses during these tough economic times. As a new commuter to transit after 20 years of driving, I am so very disappointed with the TTC bus service & scheduling. There are huge waiting gaps, and buses filled to the brim, which only adds insult to injury, to an already disgruntled ridership.

    I don’t mean to harp and complain in vain, but is it possible that there is absolutely nothing we as citizens can do to make a difference? How do I cause results? Who do I need to speak to in order address these ongoing issues? For example: Why is the Kipling GO station kept a virtually sterile station on the grid by the TTC?

    I’m really looking forward to getting my self back into financial shape so that I can afford to drive a car again. Unfortunately, I no longer believe that the TTC is “The Better Way”. That is an outright misrepresentation.

    Kind Regards,



  11. Dennis, I think you misread the motto. It’s The Better’s Way.

    (Five will get you ten a bus will show up in the next 15 minutes.)


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