In past articles, I have reported the growth in TTC capital spending and the concurrent problem in funding for the system. Over coming months, the City of Toronto and its agencies, including the TTC, will struggle to create a viable financial plan for 2012 and beyond. This will include a five-year projection on both the operating and capital sides, an exercise that will (or should) frighten those concerned with the survival of public services. However, it should also bring some discipline to year-over-year budgets and project approvals by demanding better accuracy in projections and clear justification for “surprise” projects in the out years.
The TTC capital budget is a formidable document with details in two binders of over 1,600 pages. The summary form is tens of pages long. Parts of the public presentation are so dense that one page brought a laughable comment from Vince Rodo, the TTC’s General Manager — Executive: “You’re not supposed to be able to read that”. A joke, yes, but a sad comment on the level of detail the Commission and the public see when confronted with a multi-billion dollar budget.
I have already written at length about the 2011 Capital Budget, and in this article I will focus on changes to the budget as it passed through the City’s approval process as well as the outlook for 2012 and beyond.
From the TTC to City Council
TTC staff have a long habit of finishing the detailed version of their budget only days before it is considered at Budget Committee, and for 2011 they didn’t even make that deadline. As a result, the City’s own Budget Analyst had nothing to analyze until the report reached the Executive Committee. This leaves Councillors at a huge disadvantage because there has been no chance for an independent eye to look through the budget books. In theory, this should happen at the TTC’s own Budget Subcommittee and at the Commission proper, but even they didn’t have the details when they approved the overall budget.
In response to a motion at the Budget Committee, TTC staff confirmed that their priorities for capital funding were unchanged, but that in anticipation of funding problems in 2012, some work would be put on hold. A Budget Analyst report to Council shows the revisions to major budget lines (the detailed list of deferrals starts on page 4). Council added the proposed second exit at Donlands Station to the deferrals in recognition of ongoing controversy about the design.
Looking at this doesn’t tell a lot about the TTC’s budget at the detailed level, but at the end of the day, Council left the TTC on a very short leash. Only projects that are already “in the works” have funding approval, and many areas of TTC capital spending are zeroed out within a few years. This, of course, is impractical, but Council’s view is that until new funding is obtained, the TTC will not be allowed to make new commitments.
If there must be cutbacks, then Council needs to better understand how the TTC’s budget works and how its many lines and projects intertwine. Delving into this will, no doubt, be part of David Gunn’s mandate when he returns to Toronto in a few weeks. However, it’s worth taking a look at how the budget is organized as a starting point.
The Budget in More Detail
This spreadsheet presents the TTC’s Capital Budget in its original form (before amendments at Council) and is a summary of information in the “Blue Books” (the 1600 pages of project-level detail). My purpose is to give a better sense of what each budget line actually contains, and how the projects are broken down into the five major types of spending. (In case anyone checks, the dollar totals here may not exactly match those in the Blue Books due to rounding or minor transcription errors, but the differences are quite small.)
- State of Good Repair ($7.18-billion)
- Capacity Enhancement ($35-million)
- Legislative Requirement ($358-million)
- Improvement ($106-million)
- Expansion ($167-million)
Note that the figures above do not include the Spadina Subway Extension which has its own budget separate from the main TTC books. That project is jointly funded by Toronto, York Region, Queen’s Park and Ottawa.
“State of Good Repair” sticks out like a sore thumb here, to the point that the other categories don’t really matter. This situation is painted as a “crisis” by the TTC because, they claim, the whole system will fall apart through lack of maintenance if they don’t get funding. However, when one looks at the details, one finds that some projects are inappropriately classified as “SOGR” including:
- Signal projects for YUS and BD: Some expense in this area is directly related to the age of existing systems, but part is due to the conversion to Automatic Train Control. As I have already discussed, there is some confusion about the purpose of various signalling systems now being installed. Funding for part of the ATC project was obtained on the premise that it was essential to support closer headways that would be needed after a Richmond Hill extension. That’s not “state of good repair”.
- Platform Edge Doors: This project has been justified on various grounds, but at its heart is claimed to be a means of reducing or eliminating delays due to fires from garbage blowing to track level and due to suicides. Laudable though this may be, the system has operated for decades without these barriers, and will continue to do so well into the 2020s by the most optimistic projection. This is an “improvement” project, not “state of good repair”.
- New Streetcars: Part of the $1b in this should really be classed as “capacity enhancement” because it relates to a long-standing deficiency in system capacity. Similarly, part of the carhouse costs relates to the expansion of fleet capacity.
- Additional Subway Cars and Facilities: The TTC is expanding its fleet to provide additional capacity ($160m), and this triggers a requirement for more storage space. Some “TR accommodation” costs are due to the existing fleet, but a good chunk of this budget line ($530m) is for expansion. It is unclear whether ATC control equipment is included in the budget for the additional subway cars (it was missed in the original TR order, and the cost was later rolled into the signalling project’s budget). It is ironic that the cost of additional storage space and carhouse modifications to handle the TRs is close to the cost of the trains themself.
- Fire Ventillation and Second Exits: The $263m in this line is not, strictly speaking, for “State of Good Repair”, but to bring stations closer to the current building code requirements than they now are.
My comments are not intended to suggest that this spending is unwarranted, but rather to suggest that we should return to clarity in the budget projections and the characterization of each budget line and project. The sky may still fall if projects reclassified as “capacity expansion” are not funded, but it will be a capacity issue, not one of maintaining what we already have.
This brings me to another topic. Reading through the details, it is striking how many projects relate to ongoing maintenance and replacement of infrastructure. On the subway system, much of the infrastructure — stations, electrical systems, pumps, escalators, roofs, paving — the list is endless — must have major work done or be replaced. That’s part of the cost of owning infrastructure. It shows up in the Capital Budget because that’s how the funding scheme works.
The collective size of these maintenance projects has grown over the years as parts of the subway age to the point where just patching up what’s there will no longer do. In effect, there is a separate part of the capital budget that is the unavoidable cost of ongoing maintenance, and this will grow as the system ages.
Cutting corners brings its own problems as we have seen on the streetcar system where the poor track construction techniques that brought the TTC into the early 1990s led to rapid decline in track and paving conditions. The additional spending needed to get back into “good repair” will finally ramp down in about 2016, at least for tangent track.
When so much is lumped under “state of good repair”, the term becomes meaningless. What we really have is, at a minimum, different classes of projects such as:
- Ongoing capital repairs. These projects will always be with us, although the cycle times for components will vary depending on their useful lifespans.
- Vehicle replacements. For rail vehicles, these tend to be very “spiky” budget lines as large portions of the fleet are replaced in batches rather than a proportionate number every year. Even the bus fleet has this issue as echoes of past procurement boom-and-bust cycles show up in current and future projections.
- Long-lived infrastructure. A similar situation to fleet costs exists with infrastructure such as signals that are generally replaced as one large project, but very infrequently. They do not represent a continual annual cost in the same manner as, say, roof repairs.
- Time-limited repair projects. Some work, such as the backlog of surface track repairs, is certainly “maintenance”, but represents a cost that will eventually decline or vanish in the budget. Similarly, the project to reinforce the North Yonge tunnel deals with a (one must hope) one-time structural condition.
A further problem in understanding budget lines arises from the manner of accounting. TTC budgets are organized departmentally, and into projects within departments. If what we as riders or Councillors/Commissioners think of as a “project” includes work from different areas, then the cost is scattered through different budget lines.
This is best seen in station renovations that will draw funding from diverse lines including fire ventillation upgrades, second exits, station structure upgrades, tile and ceiling replacements, accessibility, fare system upgrades, etc. It is almost impossible to find a total dollar figure for the cost of “Station X”. A similar, but more subtle problem, exists with capacity expansion projects such as the YUS extension to Richmond Hill that triggers many other changes. The difference here is that the effects are spread over a much larger extent than one station, and are also spread out in time as the buildup of demand may not trigger some requirements on “day one”.
Missing from the TTC budget presentations is a “project based” view, where a “project” is an entity meaningful to the outside world. For example, there is an accessibility project budget, but in some cases, the work will be done in conjunction with other station upgrades. Anyone deciding whether to proceed with or defer “Station X” needs to know what this involves.
The TTC’s Capital Needs, as stated in the 2011 Budget, are over $2-billion greater than the borrowing headroom available under the City’s targets, and this does not include spending for projects like the Richmond Hill Extension or a Downtown Relief Line, nor for any “surprise” increases in already-approved projects.
Whether a budget review will yield large savings, especially in the short term, remains to be seen. Council needs to better understand the budget’s components, their priority, and their role in the overall system. Calls for added funding be this from taxes, other governments or the private sector must be well-informed and balanced with parallel schemes for system expansion.
Steve Munro 
“This brings me to another topic. Reading through the details, it is striking how many projects relate to ongoing maintenance and replacement of infrastructure. On the subway system, much of the infrastructure — stations, electrical systems, pumps, escalators, roofs, paving — the list is endless — must have major work done or be replaced. That’s part of the cost of owning infrastructure. It shows up in the Capital Budget because that’s how the funding scheme works.”
There have been many news stories about subway infrastructure lately.
On the ventillation work for Lawrence Station.
On escalator/elevator work throughout the Transit system.
How much money is spent on these things?
Steve: As I said in my article, a large chunk of the Capital Budget is consumed by fixing or replacing infrastructure and equipment that is aging. For example, Lawrence Station has been open since 1973. In a previous article, I noted that the TTC had planned to increase the number of escalator mechanics so that they could staff more shifts and get repairs completed sooner. However, Council may talk a good line about customer service, but when it comes to hiring people to provide it, they are rather stingy.
You can see the dollar values for overall project lines (seen on a 10-year period) in the spreadsheet linked to this article. Finer details are available in other reports linked from previous budget-related articles.
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Speaking of “state of good repair,” I have been passing through the Downsview Station on a daily basis for the better part of the past two years, and do not need more than both hand to count the number of times that all 5 escalators I pass by have all been operational simultaneously.
Most often, an escalator is simply not working — for no visible reason. Occasionally, an escalator is out of service and blocked off. Once and a while, a blocked-off escalator has its service panels removed, but no service people are in sight. When the Moon and Mars align, service personnel are on the scene, working away. Sadly, all of this effort has never brought any significant improvement to the reliability of the escalators.
Now, I am young and can go up the stairs, so, this matter is a curiosity to me, but a serious inconvenience to many. What I do not understand is that there are escalators all over the city, many in highly used public spaces (e.g. the Eaton Center) that operate reliably, so, why are escalators in TTC subway stations so uniquely dysfunctional? Is there some special hazard to escalators that only occurs at subway stations? Is the escalator repair industry a mob racket?
Seriously! These things are always broken and the “service” billings must be astronomical. I am completely confused.
Don’t even get me started on the elevators. One has been blocked off for at least the past two months.
Steve: The TTC’s inability to keep its escalators and elevators running reliably is, one of these days, going to result in a serious complaint about accessibility. The whole premise of making the system “accessible” is to divert as many trips as possible from Wheel Trans, but that tactic fails when the “vertical transport” does not work. Of course, it’s probably “traffic congestion”, the usual excuse for problems with the horizontal variety.
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On project-based funding:
I think this is one very key issue; as illustrated by Broadview Stn, among others, tacking projects on after starting one, has the effect of creating a seemingly un-ending mess; complicates things for the original project and makes the budget for each component fuzzy.
While, in the alternative, it makes no sense to do ventilation work at a station, then finish, then a year later build an elevator; then a year later a new exit, and so on.
David Gunn, as I recollect, started the idea of bringing an entire station to ‘State-of-Good-Repair’ as one project. I recall seeing this done a few times, where stairs, ceilings, signage, paint, were all done in one project, reducing inconvenience and improving coordination.
Good, as far as it goes; but let’s add to that, second exits, elevators and any other needed upgrades should all be done at once, wherever practical.
But then you still need to address proper budgeting and timing of said projects, something which the TTC’s own staff (have told me) they simply aren’t very good at (which we all knew).
On Clarity:
Thank you Steve, for pointing out some of the more obvious non-sequiturs in the categorizations.
That’s step 1.
Next step, eliminating some of these projects (platform edge doors) all together.
On Cost and Time Creep:
The TTC really needs to address how projects are planned out in the first place; then how they are managed.
Whether its the absurd length of time the Castle Frank Second Exit is taking (now over 18 months, for a project originally scheduled for 1/2 that, which should have taken a 1/4 of that, and still seems months away)
Or the tile @ Yonge/Bloor that went missing from the trackside wall six months ago, but somehow has not been re-tiled….
This is just not the way to run a railway!
I’m no ideologue in favour of contracting out; in fact, ideally, my preference for most work is to contract in, if for no other reason than it should, on paper, be cheaper.
But there are some issues here (both for private-sector built, but TTC designed/engineered) projects; as well as those done in house … that would seem to demand outside expertise.
***
A final thought, as I’m getting long-winded here…
On the subject of station work, at minor, less-busy stations (ie. Chester or Christie) would it not make more sense to close them for a weekend or early on a weekday (8pm) and then do either a full shift or double-shift of work all at once, rather than 5-hour work periods each night?
Steve: The latest trick is the completion dates on posters talking about how the finishes have been “temporarily removed”. How many layers of updates can stick to one sign before they start peeling off under their own weight?
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I think it’s a fair (albeit not exactly simple) question to put forward: Is the TTC departmentally structured currently in a way that best meets and coordinates system needs?
Steve: I don’t think it’s a question of department structure (and the TTC has shuffled that around more than a few times, including under David Gunn). The problem is the lack of co-ordination and the insular culture of the organization.
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Sorry, maybe I’m missing something.
Does the budget analyst’s report give any indication of when the project is being deferred until?
Steve: No. The deferral is simply until the TTC sorts out its finances, or the Tooth Fairy arrives.
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Many of the escalators not working is due to kids and teenagers pushing the emergency buttons.
You think the TTC would give the Booth collector the key. No, a supervisor has to come from fairy world (TTC HQ or wherever) and turn it back on, after inspecting the escalator of course.
Steve: Rules about escalator safety are set by the Province. However, the TTC appears to be chronically understaffed for dealing with shutdowns, especially at off hours.
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Platform edge doors are considered State of Good Repair? Unless some form of Aristotelian Trans-substantiation has occurred, does not something already have to exist in order for it to be repaired?
Steve: This type of budgetary magic is sadly too common at the TTC where pet projects are buried under what appears to be something necessary, rather than something we might like to have. Platform doors beget the need for precise stopping. That begets the need for automatic train control. We claim that track level fires can only be prevented with platform doors, but then stretch out the implementation over a decade or more because of the cost. In the best tradition, the problem is always something external rather than a decline in the TTC’s own housekeeping.
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Any mention of surface rail grinders? There are a few places on the system where the concrete around the track is in good shape, and there’s fundamentally nothing wrong with the track, but running is noisy.
I rode an early-Saturday-morning Queen car, and it made plenty of noise on Lake Shore Blvd. in the fast curved section by Royal York. I imagine that when the 301 goes through at 3 AM, it might rattle windows. Surely keeping rails well-ground is a state of good repair item?
Steve: The TTC abandoned its last surface rail grinder a very long time ago thinking it was not needed.
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The TTC seems to want to classify as much as possible as “capital” rather than “operational” – even for renewals. Why does the TTC do this? Or do other city departments do the same?
Steve: This is a legacy of the way that provincial and municipal subsidies evolved. The TTC got a much higher subsidy for capital than operating, and therefore larded as much as possible onto the capital side. Indeed, there was a time when replacing a streetcar stop was “operating” but replacing a subway stop was “capital”. Why? Because a subway station is longer and it cost enough to replace the track that it qualified under provincial subsidy rules. They got around this problem by bundling together many small maintenance jobs into projects so that they would qualify.
More recently, we saw a distortion in bus purchases caused by the Fed’s insistence that any capital spending be “green”. A new bus only qualified if it was a hybrid, even though the benefit of having more buses was to improve service and carry people with less environmental effect. It didn’t matter that we could buy 1.5 diesel buses for every 1 hybrid, and that the diesels were much more reliable. So we bought hybrids, at least while the subsidy lasted.
Every organization, public or private, organizes its priorities and finances to exploit whatever source of funds might be available.
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Steve: The latest trick is the completion dates on posters talking about how the finishes have been “temporarily removed”. How many layers of updates can stick to one sign before they start peeling off under their own weight?
The latest latest trick is to simply leave the completion date blank – which makes reading the notices a bizarre exercise.
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“The TTC abandoned its last surface rail grinder a very long time ago thinking it was not needed.”
Same thing happened to the subway snowplows. Toronto would never get enough snow ever again–until the Storm of 98 hit, and Lastman brought in the soldiers (a number of whom told me they just stayed at a bowling alley for the whole time. Meanwhile the open-cut sections of the subway were mostly impassable).
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Supposedly David Gunn is doing his thing for free (plus expenses obviously).
Do you know if that is DG saying it or certain Emperor (Ford) not paying in in the name of savings (Ootes is taking $25,000 for three months).
Steve: The pro bono work has been mentioned in several articles, and Gunn has obviously been interviewed by phone for that remark about not building the Sheppard Subway. He’s had plenty of chances to correct the story.
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So all the deferred projects should reappear in the 2012 process, only to be deferred again?
Steve: They don’t re-appear until someone figures out how we will pay for them.
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Am I correct in believing that some projects that had been deferred to accommodate the Streetcar procurement reappeared in the 2011 capital budget process?
Steve: Yes. It is a big shell game.
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The TTC needs to think outside the box more, but I think that’d only be fixed with uploading to the province under Metrolinx. A few cost-saving ideas:
1) Share Bus Wash facilities with York Region
2) Outsource all parking facilities
3) On-roof car parking on the new/expanded Bus Storage Depots.
4) Let/pay Mississauga Transit, York Region Transit, Brampton Transit, and Durham Region Transit to eat away at the edges of the City.
Steve: Every garage needs a wash rack. The cost of driving buses to and from a York Region garage would quickly exceed the cost of having one per garage within the 416. Parking lots are already managed for the TTC by the Toronto Parking Authority. The bigger problem for the TTC is just getting around to washing the vehicles often enough that people can see through the windows.
On roof parking is workable, to a point with a few caveats. It would likely be for staff, not paid public parking, as new bus garages tend to be in industrial areas where there isn’t much demand for a day lot. Also, normally, garages are ventillated and lighted through their roof space. Putting a parking lot on top require that this design be changed.
Finally, yes, there are some routes where, but for jurisdictional reasons (not to mention fare sharing), there could be an overlap between TTC and 905 services. However, it’s worth remembering that the TTC already provides some services under contract for York Region and so there is already creep over the 416/905 boundary, but not in the direction you proposed.
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Steve wrote, “However, it’s worth remembering that the TTC already provides some services under contract for York Region and so there is already creep over the 416/905 boundary, but not in the direction you proposed.”
Every time I have something to go to downtown after work, I take YRT Route 90 to Don Mills Station. I can’t help but think of how lousy our non-symmetrical way of providing service at the 416/905 boundary is when we stop, half empty, at Finch and there is a crowd waiting to go south who can only look at the empty seats on our bus.
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One time way back in the summer of ’86 I saw a young mother with a baby in a stroller say,”I don’t believe this” when an elevator in Union subway station wasn’t working. I’m sure that statement has been echoed many and many times since then.
Steve: The frequency with which elevators are out of service and for long periods mocks the TTC’s commitment to accessibility.
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