TTC management unveiled its Capital Budget and 10-year forecast on January 12 with a presentation to the Commission, and followed up with a presentation at the City’s Budget Committee on January 14.

Online information about the budget is incomplete.  More troubling, however, the “Blue Books” which contain the details of all capital projects have not yet even been issued to members of the Commission, let alone Councillors or, it would appear, the City’s Budget Analyst who is supposed to digest all of this on Council’s behalf.  Full consideration of the TTC budgets was held over to January 20 by the Budget Committee to await the Analyst’s Notes.

TTC Capital Budget Report

Appendix A: Ten Year Summary

Appendix B: Sources of Funding

Appendix C: Project “Packages” For New Funding Requests

Presentation to City Budget Committee (See Pages 49-70)

Meanwhile, the TTC presented a budget with previously unknown major capital projects and additions to existing ones, but with little explanation of why they are here.

Oddly enough, the City’s Executive Committee only yesterday was in turmoil over unexpected increases in the cost of hosting the Pan Am Games due to unplanned costs for soil remediation and the fact that the project estimate was in 2008 dollars.

The TTC would do well to understand that surprises in budgeting will not be warmly greeted by the City, and moreover that they can have a compounding effect of squeezing available funding for other projects.

In this article, I will give an overview of major points in the budget along with specific comments on a few major issues.  When the “Blue Books” become available (expected later this week) and I get a chance to review the full budget, I will write on major topics such as subway fleet planning and system expansion in detail.

Overview to the end of 2010

The two decades since 1990 have not been good for transit in Toronto.  Economic decline, funding and service cutbacks brought ridership down to 1980 levels, and the system took a decade just to recover from this effect.  Since the nadir of 1996, ridership grew by 30% while population grew only 10%, and much of the growth came through recaptured demand.  Some of this came through rapid transit expansion, but a great deal on the system as a whole and outside of the peak period.

The rapid transit network is aging.  The large capital investments in the Yonge, Bloor and Scarborough lines are wearing out, and the very un-sexy task of rebuilding what we have now consumes a great deal of available funding.  Indeed, it competes with expansion projects at the very time when various regimes prefer to draw new lines on the map.

Presuming that all of the vehicle orders now in the pipeline are actually completed, the fleet will be in good shape.  The oldest of the subway cars (T1s) will date back to 1995, the streetcar fleet will be brand new, and we will finally see the last of our antique bus fleet.  The SRT will be replaced with something, although it is unclear at this point what that will be, and the continued reliability of this line is a major concern.

The funding situation has been tenuous for several years, and a mountain of spending always loomed in the distance.  Each year, it got a bit closer, helped along by the inevitable additions and growth in costs, and we are now in the foothills.  For 2011 and 2012, the available funding will pay for the committed programs, but starting in 2013 things get difficult.  This is further complicated by the fact that some funding is earmarked (e.g. the Spadina Subway extension) and cannot simply be shuffled to other projects.

In 2009-10, the TTC and City engaged in financial sleight of hand intended to preserve the City’s credit rating and to hide some of the funding crisis from view.  By deferring projects, at least on paper, the future debt requirements appeared to fall within the City targets.  In practice, the level of spending required by the TTC’s Capital plans is much higher than the City’s target can sustain.  This is not helped by the drop in projected funding from Ottawa and Queen’s Park as project-based funding winds down and all we are left with is gas tax revenue.

In July 2009, $417-million of capital projects were deferred beyond 2018.  At that time, it was hoped that Ottawa would come in for 1/3 of the cost of new streetcars, and the deferral “parked” an equivalent value of projects beyond the 10-year planning horizon.  Ottawa sat on its hands, but the projects are still with us.

• Mid-life bus rebuilds ($258m).  The TTC keeps buses much longer than many other cities and does so with a major rebuild at around the 9-year mark in their lives.  Whether this is cost-effective depends on the availability of capital to replace buses (the typical situation in the USA), or if it is better to rebuild what you have.  After reviewing the benefits of this program, the TTC has reinstated it in the 2011 capital plan.
• Fire ventilation upgrades ($55m).  An ongoing program to bring subway stations up to current fire code proved more costly than originally estimated, and has been stretched out over a longer period, generally in connection with other major work at stations.
• Eglinton terminal replacement ($34m).  This project is on hold until a decision on a future Eglinton LRT (or whatever) tunnel.  This line would drastically reduce the capacity needed for bus/subway interchange, and the land occupied by the old, decommissioned terminal is intended as a construction staging site for the subway construction.
• Station modernization ($40m).  Only projects already underway would continue (Dufferin Station is the last of these).
• On-grade parking ($25m)
• Collector booth renewal ($5m)

A further $601m was deferred in fall 2010 to address City funding limitations.

• Industrial facilities ($78m)
• Additional station modernization projects ($75m)
• Easier Access Phase II ($60m)
• Additional fire ventilation ($52m)
• Transit signal priorities ($51m)
• CIS (vehicle monitoring system) replacement ($50m)
• Buses for Transit City Bus Plan ($34m)
• Structural parking rehab ($30m)
• Additional on-grade parking rehab ($26m)
• BRT — Finch to Steeles on Yonge ($24m)
• Facility energy conservation ($20m)
• Other ($101m)

Not included in the 2010 plan was any funding for:

• BD subway Automatic Train Control (ATC)
• Platform edge doors (PEDs)
• YUS subway yard needs
• Shortfall in budget for Presto or equivalent fare collection system
• Requirements of the Accessibility for Ontarians with Disabilities Act (AODA)

The combined value of the three lists above is roughly $3-billion in current dollars, more if inflation is taken into account.  Clearly, budgeting on this basis is not credible and will lead to either financial collapse or major cutbacks in expectations and quality of transit in Toronto.

To put this in context, the gas tax revenue coming to Toronto totals roughly $300m per year, and there is no guarantee that it will continue at this level, let alone rise in the long term.  All of this money goes to pay for capital projects today, never mind the mountain of deferred costs.  Claims by various politicians, especially during the past election campaign, that Toronto should make do with what we get ring quite hollow to anyone who actually reads the TTC’s budgets.

Planning for 2011 and Beyond

With the 2011 Capital Plan, the TTC is putting back on the table those items it feels should not be deferred.  There is no point in hiding needed spending just to make the books look good.  However, one major problem with the plan is that it contains projects of considerable value that have not been subject to debate by the Commission, Council or the public.  Treating the budget as an “omnibus bill”, it is possible that proposals may attain the weight of “approval” without actually getting a line item review.  The absence of detailed project descriptions and analysis of the value of each project accentuates this problem.

For the current cycle, about half of the $1b in deferrals listed above (July 2009, fall 2010) has been put back into the budget, and other items have been added.  The funding shortfall over the coming 10 years now stands at $2.3b, although this does not include full funding of projects that stretch beyond 2020.  Large, multi-year projects have that “in for a penny, in for a pound” nature to them in that once started, they cannot be stopped half-way, and beginning implicitly creates a future need for funding and potential for compromise in budgets a decade away.

A related problem is scope creep in projects.  One major example is the renovation of the streetcar system.  Although I have always been an advocate for streetcars in Toronto, I am dismayed by the degree to which the TTC is unable to “find” all of the project costs in one go, and more sub-projects and/or cost overruns keep appearing with each budget cycle.

This undermines the credibility of advocacy work, just as creep in subway costs undermines the credibility of plans for that mode.  Overall, the TTC gets a reputation for being unable to budget properly and for creating funding crises among its frustrated partners at the City, Queen’s Park and (occasionally) Ottawa.  Transit advocates of all stripes spend precious time defending calls for more money rather than concentrating on the basic requirements for better transit, whatever mode might be used.

The major components of the 2011 capital program totalling $904m are:

• Vehicles ($315m)
• Track ($52m)
• Signals, Electrical, Communications ($125m)
• Facilities & Structures ($336m)
• Computers ($42m)
• Equipment ($18m)
• Other ($16m)

Half of funding will come from the City of Toronto (mainly through debt) and the remainder from other sources, notably Queen’s Park and Ottawa.

The 10-year view of the major projects shows the level of spending Toronto faces, as well as some of the problems inherent in the plans.  All costs shown here are in 2011 dollars.  The scope of some projects below is split into five-year segments with the intention that the “out years” are more of an estimate for planning than a hard number.

Vehicles and associated facilities

• Low Floor (LF) buses:  245 (2011-15) + 130 (2016-20) ($223m)  An important detail not yet available is a bus and garage plan showing the effect of deferral or cancellation of the Transit City network.  In past years, the TTC had assumed that the need for buses would fall as LRT lines took over demands on major corridors.  There is no reference to articulated buses, although there may be more info on this in the Blue Books when they come out.
• Bus rebuilds (deferred in 2009):  726 (2011-2015) + 758 (2016-20) ($321m)
• Wheel Trans buses: 198 of which 147 are replacements and 51 are for growth in service (in progress from 2009-12, $78m)  This item, and the general role of Wheel Trans has been challenged during the budget review.  See Royson James’ article in the Star for further details.
• LF LRV(streetcar) fleet and facilities:  This includes a number of sub-projects including creep in the overall project.
  • 204 vehicles ($1.16b):  3 prototypes will arrive in late 2011, early 2012;  production deliveries begin in late 2012 and continue at 30/year through 2013 to 2018.
  • Existing carhouses (Roncesvalles and Russell) require modifications to accommodate the new fleet, 50 of which will be housed at each site ($74m)
  • New maintenance and storage facility (Ashbridge’s Bay) ($434m).  This will hold about 100 of the new cars, and will also replace the streetcar maintenance function now performed at Hillcrest where the 30m long cars with roof-mounted equipment cannot be serviced.
  • Overhead system rebuild to accommodate new fleet (pantographs, heavier current draw per car than current fleet) ($84m).  This is a new project that was not shown in the 2010 capital budget presentation.
• Subway trains:  Like the streetcar project, this contains many sub-projects.  I will comment on this in more detail once the Blue Books are published.
  • 39 Toronto Rocket trains ($650m).  These are on order with 23 to arrive by the end of 2011 and the balance in 2012.
  • 21 TR trains ($295m).  These are on order to replace the 126 H6 cars in 2012.  Note that this is a 1:1 replacement of cars even though the TR trains are supposed to be much more reliable than the fleet they will replace.
  • 10 TR trains ($161m).  This is a new order not yet approved by the Commission.  They are intended for delivery in 2015 for system growth.  However, without the fleet plan (again awaiting the Blue Books), it is impossible to tell how these relate to the trains planned for the Spadina extension in the same timeframe.  (The Spadina trains are funded from that project’s budget.)

Automatic Train Control

A project to resignal the YUS is underway with the oldest section from Eglinton to Union now in progress.  This project will be completed over the entire line by 2017 at a cost of $286m.  Part of this is funded from the Metrolinx “Quick Wins” program, and part is included in the TTC’s future capital funding needs.

The implementation of ATC is expected to increase line capacity by 20-25% by reducing train spacing, although there is a limit to what can be achieved because of the geometry at existing terminals.  Once extensions are built at both ends, terminal operations can be split and shorter headways can, in theory, be operated.  This will also be highly sensitive to other sources of terminal delay, notably crew changes.

The new TR trains have a continuous passenger compartment through the trains and are expected to add 8-10% to the capacity of the line.

Whether all of these additional passengers can actually be handled in the stations is another matter, especially at Bloor-Yonge.  A study is underway to review the feasibility of expanding pedestrian space at this location.

The Bloor-Danforth line will be converted to ATC at a cost of $432m, but this does not get seriously underway until 2016.  A related problem is the fact that the T1 fleet that will operate the BD line will be barely two decades old, and retrofitting it for ATC will be expensive and not necessarily cost-effective.  Watch for a proposal to retire these trains “early” in about 5 years.

Yonge-University-Spadina Subway Capacity

The line is now at capacity in the AM peak operating trains on a 141-second headway (25.53/hour).  At 1,000 per train, this gives a design capacity of about 25,500/hour.  Short-term crush loads above this can be handled, but not sustained due to loading delays that stretch out dwell times and force wider headways.

There are various projects underway to address capacity and reliability:

• Toronto Rocket trains.  These will add 8-10%, but not until the line is fully converted.  The 39 trainsets in the first order-in-progress will not achieve this, and a full conversion to TR operation will not be possible until the second order arrives likely by 2014.
• Automatic Train Control.  This will allow trains to operate closer together shortening headways in locations that are now congested (notably Bloor Station).  However, there will still be a physical limit due to terminal geometry that will prevent trains from running much closer than 120-130 seconds.
• ATC will also allow the line to convert to “high rate” operation because there will be no need to physically reconfigure the signals for different train speeds.  This reduces the number of trains needed to provide a given capacity, but does not add to the capacity of the line itself.
• Crossovers.  College crossover will be reinstalled on the weekend of January 29-30 (the Yonge line will be closed all weekend from Bloor to Union).  King and Rosehill crossovers will follow in the next two years.  These manually-operated crossovers were removed many years ago to eliminate maintenance requirements, but they are to be reinstalled and automated to allow emergency shutdowns to affect a shorter part of the line when they occur.
• Union Station 2nd Platform.  This project increases capacity at Union to deal with projected growth in transfer traffic to/from GO Transit.
• Yonge-Bloor Station.  The crowd control practices now in place allow a few more trains/hour to get through the station.  The physical layout of the station places a limit on what can be achieved here, and a study in 2011 will look at the possibility of expanding pedestrian capacity.  The estimated cost of changes to Bloor-Yonge station is $200m, but given the credibility of other TTC estimates on complex infrastructure projects and knowing (from a previous study) the difficulties involved at this location, I will be very surprised to see them hit this target.  The “soft cost” of disruption to service and passengers during construction is almost certainly not included.

All of these schemes are intended to improve capacity from 30K (current crush load) to 45K (future crush load) per hour.  Allowing for the additional capacity of the TRs, this would require a headway of about 105 seconds.

To what degree these changes are practical or can be implemented are questions that have not yet been answered.  The TTC plans do not include the Downtown Relief Line because it is their position that this line would come only after all of the proposed spending on increased YUS capacity.  In effect this pre-judges the outcome of the DRL study now underway, but it is no secret that TTC management have no interest in that project and prefer to put all their eggs in one basket, whether it has room for them or not.

A larger fleet requires more carhouse space to accommodate it, as well as changes at Wilson Carhouse to support maintenance of 6-car trainsets rather than 2-car married pairs. When the TTC planned for the buildup of its fleet on the YUS line, it assumed that it would get a new carhouse somewhere north of Steeles Avenue, but this will definitely not happen in the timeframe required.  The cost at Wilson Yard is projected to be $658m.

The TTC has also discovered an “oops” in the future operation of Wilson Yard in that it is impossible to get all of the trains needed to run the YUS into service in the timeframe available. They propose two options:

• Close the subway at 12:30 am so that the maintenance window between end and start of service could be preserved.
• Build a tail track north of Finch Station to store trains.  This would, in effect, be a pre-build of part of the Richmond Hill extension, and would also be the functional equivalent of the underground yard proposed for Richmond Hill itself.  This has a projected cost of $350m that is not included in any budget, but is a very real part of the cost of adding more trains to the YUS fleet.

Infrastructure Renewal

The 10-year plan includes:

• Roofing and paving ($280m)
• Bridges and tunnels including structural paving and rehab, tunnel liners and leak prevention, bridge and beam maintenance ($457m)
• Fire ventilation & second exits ($263m)

Fare Collection

The current estimate for Presto implementation is $332m of which $140m has been funded through CSIF (a joint federal, provincial, municipal program) and $192m remains to be found.

The TTC has, however, concocted a new program at a cost of $87m to retrofit the streetcar system in anticipation of a failure to roll out Presto (or some equivalent) before the new fleet is in operation.  This includes $70m for onboard equipment and $17m for on-street fare vending equipment at 150 major stops.

This is a clear example of double-counting.  If the TTC does not reach a point where some form of automated fare collection is being rolled out soon, one must ask whether the streetcar retrofit is a throwaway item, or will be engineered for transparent migration to a new system.  If ever there were an incentive to get on with a new fare system, then avoiding a double-implementation must be it.

I must also question the cost of $87m just for the streetcar system when the entire Presto rollout is budgeted at $332m for the complete network.

This sort of “surprise” costs, along with others related to the new streetcars, makes me wonder if there is a fifth column within the TTC trying to make the new streetcars seem as expensive as possible and, thereby, engineer their demise during an anti-streetcar mayoralty.

Accessibility

Provincial legislation (AODA) requires full accessibility by 2025.  Although the TTC plans to meet this goal, there is a serious problem with funding especially for station modifications.  This includes:

• Easier Access Phases II and III ($283m in 2011-20 with more to follow in 2021-25)
• Wheel Trans fleet renewal and expansion ($116m)
• Wheel Trans operating costs

Major Changes in the Budget

Almost $900m of new items have appeared in the budget for the coming 5-year plan.  Some of these are resurrected from deferrals in past years, and some are net new.  The TTC’s list includes:

• LRV fleet and facilities ($211m) including streetcar overhead and network upgrades, carhouse modifications, cost increases for Ashbridge Carhouse, and timing changes for the LRV supply contract.  They do not include the fare collection changes noted above.
• Subway fleet and facilities ($267m) including part of the cost of yard expansion (some is beyond 2015) and the 10 subway growth trains new in the 2011 budget.
• Bus fleet and facilities including bus purchases, the resurrected rebuild program and hoist replacements (103 of 146 hoists in the system need to be replaced in the next 11 years).
• Industrial facility requirements ($47m) which includes Health & Safety and Environmental upgrades.
• Platform Edge Doors ($118m).  This covers only the installation of doors on the southern “U” of the YUS from Bloor to St. George.  The full project cost for the YUS is $492m, and for BD is $510m.  To date, the TTC has not produced a credible justification or business case for this huge expenditure.
• Other projects ($104m).  This probably includes some of the smaller projects reactivated from deferrals in 2009 and 2010.

How Do We Pay For This?

There is a $2.3-billion shortfall between the available funding and the project requirements in the 10-year window from 2011-20.  This is caused by:

• The decline in Provincial funding from about $240m in 2011 and 2012 to about $115m from 2015 onward, and an unexplained further decline in 2019-20.
• The decline in Federal funding as its project-specific commitments (Spadina extension, fare collection) wind down from $179m in 2011 to $154m from 2016 onward.
• The decline in the City debt target from a high of $520m in 2012 to about $100m from 2016 onward.

Note that in this entire discussion, I have not mentioned the Transit City projects or anything that might replace them as these are, at least today, entirely funded through Metrolinx.  If a new transportation plan requires the City to supplement available money from other governments, this will be in addition to all of the TTC’s stated requirements.

For funding purposes, the TTC has concocted “packages” (see Appendix C linked at the beginning of this article).  It is worth noting that some of the items included there have not yet even been presented to the Commission or Council as proposed projects, and some of them might properly be construed as part of system expansion within the Metrolinx “Big Move” framework.  The total value of the packages is $2.9b.

If Queen’s Park and Ottawa ponied up two-thirds of these packages, the shortfall left to the City would be relatively small.  However, a small army of Tooth Fairies will be needed to pull off this bit of magic.  If nothing else, competing demands in the GTA will divert attention from funding what is seen as “Toronto’s problem”.

This brings us to “Plan B”.  TTC management proposes to report later this year on a capital program that will be sized to available funding.  As a sense of what may be cut, they produced a detailed list (see pages 64-68 of the Budget Presentation linked above).  When this was at Committee, the TTC was asked to report back on whether this is the appropriate prioritization of projects, a clear attempt to dislodge some of the larger items from their “above the line” status to make room for other schemes.  How soon any comments might be available on this is uncertain, but obviously it has to plug into the City’s budget planning.

Oh Yes, Did We Also Mention …

The Spadina Subway extension to Vaughan is under construction at a budgeted cost of $2.634b, and opening is planned for late 2015 (oddly enough after the Pan Am Games).  The estimated cost is under review to address escalation, unforeseen technical issues and added elements in the project.  To date, these changes have been handled within the project contingency, but there has been no public report of what changes to the project scope have occurred, if any, to contain the total cost.

The Transit City projects are all “under review” and it is quite clear that under Mayor Ford’s administration they will not proceed as originally designed.  Although these are now entirely funded through Metrolinx, it is unclear what additional costs might be charged to the City to expand the scope of work.

The Yonge North extension is currently estimated at a cost of $4.008b, and it is not funded anywhere.  This is part of the Metrolinx Top 15 list, but as they have not yet produced a multi-year funding plan nor their “Investment Strategy”, it is impossible to know the timing of this project or the alternatives that might be considered.  Note that this $4b is over and above any changes to the existing YUS needed to handle the increased demand an extension would bring.

Waterfront initiatives including the line through the East Bayfront to Parliament Street and the Cherry Street line are underfunded.  The East Bayfront line is $100m short based on the City Budget Analyst’s review of Waterfront Toronto’s capital budget (see pp 17-18), and there is no funding for Cherry Street, let alone the connection under the rail corridor or any future service into the Port Lands.

The Downtown Relief Line, as I mentioned above, is not one of the TTC’s pet projects, although they are supposed to be studying it.  Whether this study extends north of Danforth to Eglinton remains to be seen.  Preliminary comments last fall suggest that the study stops at Danforth and, therefore, is of limited value.

There are more unfunded projects, but I think I will stop here.

A Few Parting Words …

We have a very serious, structural problem with transit funding in Toronto.  Many projects have been ignored for years, or delayed in the hope that someone else will pay for them.  Queen’s Park has been less than helpful in creating a “regional” transit agency for whom local projects are of little concern.  The TTC’s inability to produce credible budgets undermines the effectiveness of even the most sympathetic of advocates be they amateurs like me, professionals within agency staffs, or politicians.

Couple this with a municipal regime whose raison-d’être is to constrain spending, the possibility of a new government at Queen’s Park, and an economic climate that makes the boomtown days of transit spending a very distant memory, and we have a recipe for very serious problems in transit financing.  Some may argue for private sector intervention.  This may address some issues, and I say “may” only because we have yet to experience a London-style meltdown of a PPP here, but it will not eliminate the problem.

Toronto is decades behind in transit construction, and the absence of transit undermines political support for better service.  We fiddle around the edges, we agonize over arcane questions of accounting and inter-agency responsibility, we keep every consulting engineer in southern Ontario (and many beyond) employed studying lines that will never be built, but we don’t ever commit to actually spending money on infrastructure and service.