TTC 2012 Operating Budget Preview (Updated)

Updated June 9 at 12:01 am: During discussion of the preliminary budget at the June 8 TTC meeting, staff repeatedly noted that all estimates are based on current Service Standards which drive the quality of service to be provided in the face of growing demand.  This is a troubling state of affairs because we will almost certainly face a proposal to cut service quality by amending the standards as part of the 2012 budget process.

The last thing the TTC needs is a return to a there’s-still-room-on-the-roof planning which is a guarantee for declining customer satisfaction and employee morale, and for strangling ridership growth.

Chair Stintz made reference to the level of rider subsidy and observed that it is uneven across the system.  Would new standards be imposed that would trim routes and periods of operation beyond what already happened in May 2011?

The Commission desperately wants to preserve service (one of Rob Ford’s campaign slogans), keep costs down, and yet somehow squeeze much of the cost savings out of “efficiency”.  This is simply not possible, especially if Council imposes a cutback in the TTC’s operating subsidy.  Combining the known shortfall in the 2012 budget, the likely pressure from wage increases of the now-essential TTC workers, and a potential subsidy cut, there is a gap of over $100-million.  A good chunk of this is directly traceable to the short-sighted decision to freeze fares and eliminate the vehicle registration tax in 2011.  Another large contribution comes from the expected 1/3 increase in the cost of diesel fuel.

Management has been asked to look at opportunities for staff cutbacks that will not affect service, and this means that any cuts will disproportionately hit support services that make up a small proportion of the total organization.  Moreover, even assuming cuts can be found, this is a one-time fix and the cost pressures will return in 2013 and beyond.  Options to be reviewed include contracting out and sharing functions with the city.  It is unclear whether some Commissioners have grasped the idea that increased crowing on buses is a service cut, or if all they care about is that some transit vehicle wanders by now and then to preserve a fiction of service.

The timetable for finalizing the budget will see a report to Council in September with options for the TTC budget, and a final version, based on Council’s direction, to the TTC board in October.

The original June 8 post follows the break below.

On June 8, the TTC will consider reports showing the general outline of its 2012 Capital and Operating Budgets.  This article deals with the Operating Budget, and I will turn to the Capital report in my next article.

The Operating Budget presents a severe challenge for the City of Toronto which faces a deficit of around $700-million going into the budget process.  (An earlier, higher figure has been reduced by better-than-expected results in the final accounts for 2010.)

Presuming that the operating subsidy from the City remains at $429m, the TTC projects a shortfall of $39m not including any additional costs resulting from the new wage contract effective April 1, 2011 (negotiations are still underway).  Wages and benefits account for about $1b of the total running cost of the TTC, and so a 1% increase in compensation translates to roughly $10m in extra annual expense.

Part of the overall budget deliberations will involve the City’s “core service review” and that could well lead to changes in service standards and fare policies (what services should the TTC provide and how much should it be prepared to subsidize riders).  The report is silent on these issues and offers no discussion of the options that might be under consideration.

While the TTC projects a need for $39m in added revenue, not including the provision for wage increases, it is well known that the City is looking for cuts in spending by its departments.  Recently Councillor Michael Thompson floated the idea of a 10% cut in funding of the Toronto Police Service.  (TPS is completely funded by the City and so its effect on the City Budget is more than the TTC’s even though its total budget is smaller.)  If the same tactic were applied to the TTC, it would mean a cut of about $43m in the City’s subsidy which, coupled with other cost pressures on the TTC, would mean devastating service cuts and/or fare increases.

TTC and City staff are still working on a multi-year projection of ridership and finances, a topic that has been under discussion at City budget debates for some years.  This is an extremely important piece of work because it would take the debate about transit funding, ridership, system growth and fare policy beyond the scope of an annual circus.  That circus may suit some who prefer a stage-managed crisis and political theatre over good planning, but it’s of little use to the transit system.

The gap between revenues and expenses is expected to grow at $50m-$70m annually without any change to subsidy or fare levels, and presuming continued growth of riding and service to match.

In 2012, ridership is expected to crest the half-billion mark at 502m, up 3.1% from the 2011 budget figure of 487m.  This will be the primary contributor to a projected $32m increase in revenue for 2012 ($29.6m from fares, $2.6m in other revenue).  Actual 2011 ridership is running ahead of budget and is expected to be about 490m.

For the “conventional system” (excluding Wheel Trans), the TTC estimates a subsidy requirement of $468.1m presuming that service is maintained at current standards and there is no fare increase.  They start from the assumption of a City subsidy of $429.1m, the approved subsidy level for 2011.  (Approximately $90m of this is actually paid for by Queen’s Park from gas tax revenue with the remainder coming from City funds.)

Service is budgeted to increase by 3.3% in hours and 2.7% in kilometres.  This is a combination of service changes to handle ridership growth and the full year effect of changes implemented in 2011 such as the May service cuts.  The cost of additional service is budgeted at $19.3m.

Fuel is an important part of the cost mix at the TTC.  In 2010, mainly through careful hedging, the TTC saved $15m relative to budget on diesel fuel.  This was about half of the “surplus” the TTC reported at year-end.  Other fuel savings came from the elimination of bio-diesel ($1.5m) and from lower consumption by hybrid buses ($4m).

While this is an impressive achievement, the TTC cannot budget on the assumption of a repeat performance.  Moreover, fuel prices are now rising rapidly, and the TTC budgets for diesel fuel expense to rise from $86m to $121m from 2011 to 2012.  Just over 10% of this increase is attributable to extra service with the remainder coming from higher pricing.

“Other Employee Costs” (benefits, pensions) rise by $8.6m.  Some savings have been achieved in this area through a new joint contract by the TTC, the City and the Toronto Police Service with Manulife for administrative and underwriting services for employee and pensioner benefits.  (This is an initiative started by City Council in 2008, but only now implemented as all of the then-existing arrangements were run out to their expiry dates.)

Bus maintenance costs will rise $4.5m due to the added complexity of new vehicles, the end of warranty coverage and other technological changes.

2012 is a leap year, and this will add $2.8m to operating costs.  This is partly offset by the added ridership and fare revenue (except for monthly passholders).

Text messaging (sending “next vehicle” info) is expected to cost $1.3m in 2012.  The TTC is considering a business model for provision of customer information and expects to make a “pricing decision” in the next few months.  I cannot help noting that there are other ways to deliver this information than using SMS, and any review should include web access such as is available from NextBus or from various third-party applications.

There are a variety of other changes listed in the budget report, but they are all relatively small.  They are important in that they reduce the net additional revenue needed to balance the books, but some of them cannot be replicated year-over-year.  There are only so many efficiencies to be squeezed out of an organization, and savings from better technology (such as the replacement of old H-series cars by TRs) only occur once.

The budget for accident claims has been flatlined at $33m.  As part of the recent provincial budget, transit operators were exempted from no-fault insurance, and the TTC expects that this will lower their claims cost.  The effect will be gradual as claims from accidents after the change took effect become the majority of cases.

There is a provision for additional workforce required for improved service, and this is partly offset by reductions in maintenance staff for subway cars and Orion V bus work.  Over the past 20 years, the Operating Budget workforce has grown less than the population of Toronto (14.7% vs 20.8%), and much less than the amount of service (24%).

Still unresolved is the question of pension fund solvency.  The TTC is seeking an exemption from the need for full solvency on the grounds that it is not going out of business.  I discussed this and many other issues in a previous article reviewing the TTC’s financial statements for 2010.

The overall review of the City’s budget is just getting underway.  What is notable by its absence from the TTC budget report is any discussion of the options available, or the effect of any decision that might be taken on reducing subsidy levels.  We can reasonably expect that there will be at least an additional, unbudgeted cost of about 2.5% in the coming wage settlement based on other activity in the public sector.  This would add about $18m to the 2011 budget (requiring an in-year adjustment), and $25m to the 2012 projection.

This would bring the gap between budget and subsidy up to about $64m and require a fare increase of at least 7% if no other funding source or significant reduction in operating costs were found.  Another round of service cuts would be counterproductive for several reasons.

  • We were told early in 2011 that the May cuts were to pay for service improvements in coming months.  If they don’t appear, that’s a broken promise.
  • The scale of cuts needed to address the 2012 budget shortfall is much, much larger than the value of the 2011 cuts.  Any pretense that only the least productive of services were being sacrificed “for the greater good” would not be credible.
  • We could see stealth cuts implemented through changes in the Service Standards akin to the invention of a new rule about riders per vehicle hour used for the May 2011 “reallocations”.  Any such proposal needs to be discussed publicly and its effect clearly understood.  If crowding standards are worsened (that is to say, a “full” bus will have more passengers on average), this will affect the attractiveness of service and will undermine the shift of riding from autos to transit.

Equally counterproductive would be cuts to maintenance quality.  The TTC is already criticized for the cleanliness of its system, a situation it sought to remedy partly in 2011, but the worse cutback come out of sight, on those systems and infrastructure where deferred maintenance has long-term consequences.  We went through this in the 1990s and should have learned the folly of such tactics.

Finally, there isn’t one word in the budget about improvements to Customer Service.  The cost of any new initiatives will have to be added to the budget, or taken from something else.  The TTC needs to be clear on what we are getting in 2012, and how much of the hopes for improvement lie in the garbage heap of budget constraints.

43 thoughts on “TTC 2012 Operating Budget Preview (Updated)

  1. I really do think the TTC should just stop with all the technology stuff for now.

    Call me old fashioned, but I find the TTC’s paper schedules at bus stops, and simple information seems to work well.

    It may not be fancy, but the system works, including using just tickets and monthly passes 🙂

    Steve: The problem with the paper schedules is that they rarely reflect the times vehicles will actually show up. Either they are out of date, or the vehicles are running on a schedule of their own devising. At least real time info, such as is (or will be) available from NextBus, tells you when the streetcar (and eventually bus) will actually show up and whether it’s worth waiting for one.

    As for passes and fare collection generally, the biggest problem is getting an agreement on revenue splitting and the combo fares that would apply to cross-system travel. That’s a political and financial problem, and much harder to solve without new money from somewhere than the technology implementation of Presto or any other system.

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  2. “Text messaging (sending “next vehicle” info) is expected to cost $1.3m in 2012.”

    That’s a lot of money just because they forgot to mention the website on the stickers they put on the stops (or anywhere else for that matter). I guess I’ll have to do it myself.

    “Call me old fashioned, but I find the TTC’s paper schedules at bus stops, and simple information seems to work well.”

    What route are you on where the schedule is so reliable?

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  3. Steve:

    I am impressed by the depth of your understanding, but even when you spell everything out in a clear and concise fashion, this is still a difficult topic to understand in all its aspects. Changes in one area affect another and there are so many “by stealth” approaches that can obscure a clear vision of the future.

    Did I understand from your discussion that a fare increase of 7% or so would largely result in the status quo – or a wee bit better with already promised improvements. If so, that is a minimum pre-requisite for the beginning of any discussion. Coupled with the foolish – politically inspired – fare freeze this year, that would mean a two year increase of a bit less than 3.5% a year (a bit less because last years portion of the increase is not compounded.) This is not out of line with the general rate of inflation and any excess can be justified by improving service.

    Despite my social democrat leanings, I have never been shy about my support of service quality as opposed to cheap fares. I have just returned from London where you don’t have to run for the bus, because the next one is just behind. Transit there is not cheap – but it does provide great service. (Truthfully I was in a high demand area. I can’t speak for service quality in the suburbs. However, even in the “high demand” area, I never encountered a bus – at any time – that was as hopelessly overcrowded as an Ossington mid afternoon – non rush hour – bus that I took this week.)

    The TTC should not have to pay (any more than the police should – who will not) for the mismanagement of the budget process by our Mayor. However, if the choice is between an even greater fare increase and service cuts, the fare increase must prevail.

    We have made the first halting steps forward after years of the Transit Shrinkage Policy (defacto and unannounced). We must not slip backwards from the modest start we have achieved, notwithstanding the artificial crisis created by our Mayor.

    Steve: I lean toward a fare increase, but would like to see better funding from the province. They used to give us 50% of the operating deficit, effectively 1/6 of the budget. That would be about $250m. In fact, we only get $90m, and that’s by taking gas tax money that should go to the capital budget and allocating it to operations. Mike Harris completely cocked up transit funding, and the Liberals didn’t fix it. I am not holding my breath.

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  4. Having fare increases equal to the rate of inflation is acceptable to me. Having no fare increase means decreases in service (as shown with the 40+ bus routes) or a BIG increase in fares the following year.

    The problem unfortunately remains on the assumption that everything increases at the prescribed rate of inflation, not true. We may tell our staff to cut back on salary increases, but the cost of purchases could still be over the rate inflation as seen with fossil fuel products (IE. diesel, asphalt, etc.) will mean further cuts to service down the line.

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  5. How much revenue is a 25¢ fare hike (and corresponding Metropass hike … presumably about $10 for a 25¢ fare hike) worth?

    I’ve seen quite a few routes where the paper schedule is very good. It might not work on Dufferin or Don Mills (though it’s certainly pretty good for the night buses), however for smaller routes like Main or Woodbine, the paper schedule is very accurate!

    Steve: When the TTC proposed a 10 cent fare hike in January, then rescinded the idea, they gave up about $24m worth of revenue for the 11 months January to December. Presuming that the elasticities would be the same, that is to say that the same proportion of riders would be lost to a fare increase (this is a hard call), then we are looking at an increase 2.5 times greater, and for a period 12/11 longer (full year). That’s about $65m. However, if we also get service cuts, or reductions in service quality (crowding), then there will be a longer term effect where people give up on the TTC and fare increases compound a negative impression.

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  6. I find it interesting you guys have so much trouble with the paper schedules.

    I don’t want to start having problems, but I find the paper schedules at the bus stops almost always work well and the buses come when they are supposed to.

    I can count the times the buses have not come when they are supposed to.

    So for me the paper schedules work fine.

    I mostly use bus routes in Scarborough.

    I think the issue of buses not coming on time is blown out of proportion, due to the couple routes which experience problems.

    To be honest, I find the next bus display like they have on VIVA, etc not reliable. It always says a bus is coming, then it will change the time and say the bus is due, even though no bus comes for another five minutes, etc. Those displays are not as exact as some may think.

    If money is tight, then I would rather it go to service than high tech toys which cost a ton to maintain and don’t really offer much benefit over the paper schedules.

    In terms of standards, the TTC is one of the most efficient systems around, and the city has be told that the TTC will not be cutting to fit a political agenda. This city has money. It is just playing games.

    Steve: There are two issues with paper schedules. First, they are not always correct. The TTC takes a long time to get around to updating them when there is a schedule change, and sometimes this never quite happens. Second, even when one consults the online schedule which is accurate, the buses don’t run anywhere near the advertised times. This is a route-specific problem, and indicates a problem both with the schedule’s design and with route management. Some routes are not managed at all.

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  7. Funny how TTC is experiencing record ridership and all the talk is about cuts cuts cuts.

    Steve: Transit systems are supposed to be basket cases, failures that should be ditched from the public purse to the nearest, politically friendly private operator. Sadly, the TTC doesn’t fit this stereotype. As for cuts, Toronto Council created this mess by endorsing Ford’s raiding of the cookie jar to freeze property taxes, eliminate the vehicle fee, and freeze transit fares. Makes them really popular, at least until the real effect of the lost revenue shows up in vanishing services people depend on. The phrase “I didn’t vote for this when I voted for Ford” will become more and more common over the next year as the budget bloodbath proceeds.

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  8. I find that paper schedules only work well for an intended standard loading. That is about 30 people average. If the number falls to 5 to 10 passengers, buses zip by arriving 5 minutes early by the middle of the route. If the number suddenly raise to 50+, that bus would likely be behind schedule. This is really common at major transfer location where a late bus dumps a lot of passengers off. Jane and Lawrence is a good example.

    Some routes keep better schedules than others. Scarborough buses seem to be better than Etobicoke buses. In the central part of Etobicoke, less people take transit leading to buses arriving quite early. The 46 Martin Grove bus 99% always arrive 5 minutes early during off peak times. I wonder why they even put up these schedules. The 191 Rocket is a much better organized route.

    Lawrence West is a disaster in pm peak. The high floor GM buses on the 52 Lawrence West makes it quite difficult and slow for seniors and strollers. With the 71, 77 and 90 moving to low floor operation, we’ll probably see even more of these GM buses on the route. Note that half the 52 buses would short turn at Royal York in PM peak on a bad day. Will the TTC design a system to replace the old paper schedules?

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  9. So if the elasticities hold a 25¢ fare hike (and corresponding $10 or so Metropass hike) would cover the deficit, and a 2.5% union settlement for 2012.

    The last fare hike didn’t seem to impact ridership much. Wouldn’t have been one for 2 (or is it 3) years.

    Assuming that there is no increase in funding from the city or province, it seems like a relatively painless no-brainer, that doesn’t need to create any drama.

    And yet I’m sure it will.

    Steve: In the interest of fairness, I should point out that there were years with fare freezes under David Miller too, but these were implemented with the intend of driving down the cost recovery ratio, and with support from Council for better service and subsidies. With Ford, the only concern is to appear to be cutting costs for voters either by freezing user fees or taxes.

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  10. 3.5 years to go until a progressive transit friendly mayor returns to office (I and many others here hope), but until then we must endure some dark days in transit riding ahead.

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  11. “I think the issue of buses not coming on time is blown out of proportion, due to the couple routes which experience problems.”

    The routes with the problem tend to be the ones with the highest ridership, Queen, Dufferin, Finch West, so it affects a lot of people.

    I find the 80 Queensway is often late, or worse, early, despite not having to deal with heavy traffic or ridership.

    The money for the arrivals predictions has mostly been spend. It is supposed to go live for buses any week now. Once you start using it, you’ll wonder how you ever lived without it.

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  12. To be honest, I don’t really use schedules much anyway, and don’t think I will use the live arrival much. Toronto buses run so frequently, that I just go out to the stop and wait.

    Steve: Even though I live downtown, my services are often disrupted by short turns and other phenomena. It’s really handy being able to look ahead at a potential transfer point to see what the service there might actually be and whether I am about to land in a huge gap. Of course this is best provided by a non-TTC app like whereismystreetcar on my Blackberry because the TTC’s own interface to the data is so kludgey and difficult to navigate.

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  13. The TTC fare should be increased to maintain existing or better quality of service. The York Region Transit one-zone fare since Jan. 1, 2009 is $3.25, so an increase in 2012 is likely (historically GO/YRT fares are multiples of 25 cents). Hence a TTC increase from $3.00 to $3.50 would not be out of line starting next year. Increasing the City’s operating subsidy, tax levels, etc. should be decided in future elections. What is not acceptable now is cutting service.

    Another way out of the conundrum, which nobody seems to have raised recently, is to abolish the TTC monopoly. A few years ago I encountered this as follows: the University of Toronto used to run free shuttle buses between the downtown St. George campus and its campuses in Scarborough and Mississauga. It was decided that the University would have to charge a fare to keep this service running; the result was that while a paid service to Mississauga was instituted, the shuttle to Scarborough was eliminated and students and professors were told to use the TTC (i.e. they use their cars, because the TTC commute between St. George and UTSC is horrendous). This of course is because Scarborough is in Toronto, Mississauga is not. Within Toronto, the TTC has a legal monopoly on paid transit.

    With safeguards to prevent unproductive predatory competition and cherry-picking, opening up transit to private operators could fill in the gaps which the TTC cannot service. I was quite impressed by such a mix in the Polish alpine resort town of Zakopane, where at each bus stop there were posted schedules of several operators, especially for night service using small buses.

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  14. Darwin O’Connor says:

    “The routes with the problem tend to be the ones with the highest ridership, Queen, Dufferin, Finch West, so it affects a lot of people.”

    Finch East can be added to that list too. The schedule says every 4 minutes during rush hour but it usually comes every 10 minutes. Admittedly, this is an improvement over the 20 to 45 minute headway 6 months ago when the 199 was introduced. It’s not as good as the pre-199 service which was every 2 minutes in the PM peak and every 30 to 60 seconds during the AM peak.

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  15. Like I said, I think the issue of buses not coming on time is more of a “downtown issue”

    The buses in the outer areas like Scarborough run like clockwork most of the time, and the service is frequent.

    When it comes down to it, if we have to make a decision on service or these high tech toys. Then I would say to stop the high tech stuff until more funding is available.

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  16. Text messaging costs… in the UK, you can send texts to get info on trains. When you receive a reply, you are charged 20p. (Error messages are free). Is that possible with Canada’s cellphone system? Alternatively, could the TTC charge extra for texts sent to their system? (Certainly the info should be freely available on the website. Lots of people don’t have cellphones).

    I agree paper schedules at stops can get outdated or fail to match reality, but I’d rather *some* information at stops, so (1) I know I’m at the right stop and (2) I have some idea how long it will take to get to my destination once actually on the bus.

    Toronto has about 11,000 stops. In the UK, the West Midlands has about 15,000 stops, with services provided by myriad of operators (although two of provide about 90% of service between them). Nevertheless, they manage to have accurate, up-to-date stop info at every single stop.

    Steve: It’s one of those “TTC culture” things where different departments are responsible for different pieces of the process. What amazes me is that the TTC would send crews out with paper signs that have to be attached to every stop, and then send out a crew again to change the stop cards with the schedules. Clearly the message about “customer service” has not percolated through the organization. “Excuses” and “commitments to improvement” are faint substitutes for actual achievements.

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  17. Steve

    Wouldn’t the impact of the settlement contract be more than $25M in 2012. I assume your $18M for 2011 is 2.5% for 9 months. If this is carried to 12 months in 2012 it would be $25M. However, wouldn’t there be an additional increase of 2.5% in April 2012 making the total 2012 impact $43M.

    Steve: Although there is another increase in April 2012, for budgeting purposes it will be relative to April 2011. Over the calendar year, wages, whatever they are, would be 2.5% higher than in 2011. Even without the new contract this year, we have three months of the increase that came into effect on April 1, 2010.

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  18. I think there is now less elasticity in Toronto’s transit ridership than many believe. As part of a larger “fix-it” budget process, a $0.50 base fare increase would allow the operational subsidy to be trimmed and possibly allow more “service reallocations”. It would also mean we wouldn’t be faced with an immediate shortfall again in 2013 with a corresponding hike.

    Gas prices have gone up 30% in the last year, that cost has to be passed on somehow.

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  19. The issue of having separate crews at the bus stops putting different information up has a lot to do with covering the TTC’s butt.

    Often the service change notices are put up before the changes. The schedules have to be changed after the changes go into affect. If they are changed before the change, the TTC could be open to major customer service issues if someone reads that schedule and is waiting for a bus time that does not start for another week or two.

    Steve: Yes, but when the service change notices go up AFTER the changes are implemented, there is no excuse for not changing the schedule and posting the notice in one visit, let alone visiting the same stop twice four times, twice for each route affected.

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  20. Looks like the shortfall may increase. The TTC has changed its mind on Presto and now wants in. How much more money would this add to the budget? The only bright side is that we finally have smart cards, which would make intermodal transfers more smooth.

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  21. @Michael

    Well it’s a North York issue too.

    You might like referring to it as a ‘high tech toy,’ but once Nextbus rolls out for buses I’ll be willing to take routes where vehicles come every 1/2 hour (since that way I wouldn’t have to wait – I could leave home just a few minutes before I know it’ll be there).

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  22. Be careful what you wish for. In Israel, public transit is provided by many different operators; one company is the primary operator in Jerusalem, another in Tel Aviv, but all companies have a presence in both cities. This creates many different problems, not least of which the fact that different companies may run the same route number on different bus routes. One’s own bus pass is only valid on one company with no transfer privileges, which is not always the best way to get from Point A to Point B. And even if any of them could maintain a proper schedule, it can be near impossible to figure out which provider has the most direct service for your trip.

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  23. Can the TTC just please close the Sheppard Line on weekends or limit the service on weekend a lot? That line is honestly very underused on weekends and I don’t see why they’re wasting money running it on weekends when probably more than half of the TTC bus routes carry more passengers than the Sheppard line. This would be one step in saving money without true service cuts.

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  24. According to today’s Star, there is a new threat of further TTC service cuts.

    I doubt there is enough fat to cut. Even firing subway collectors (as many Star commenters suggest) would require either new turnstile barriers or lots of fare inspectors. Is the TTC allowed to defer the costs of Presto? How big a fare increase would cover an $85 million shortfall?

    Steve: A 25-cent fare increase is 10 percent on the current token fare. Total fare revenue is $1-billion, and a ten percent bump would be $100m. However, that size of an increase would likely drive away some riders and the offsetting loss could be as high as $40m. The last time the TTC had a fare increase, they lost no riders because they were also maintaining and improving service. If they try to jack fares and cut service, they won’t be so lucky.

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  25. Steve:

    The link to the Star article goes back to the start of this article- o to the Star.

    Thank you

    Michael

    Steve: Thanks. Fixed a bad URL.

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  26. Vic said:
    “Can the TTC just please close the Sheppard Line on weekends or limit the service on weekend a lot? That line is honestly very underused on weekends and I don’t see why they’re wasting money running it on weekends when probably more than half of the TTC bus routes carry more passengers than the Sheppard line. This would be one step in saving money without true service cuts.”

    As a user of that line on weekends, I agree it is under utilised except one way each during rush times. But, I’m not sure how you could limit it more on weekends without endangering its usefulness in the future. IIRC, on the weekends there are only 4 sets running at one time. Right now, that’s providing service every 7-8 minutes. Make it two and you get a service delivery of every 12-15 minutes. People won’t use it and then it becomes even more tempting to mothball bits and pieces. Who wants to be Mike Harris and just fill in the hole?

    I get that people intellectually hate the Sheppard line. However, once we go down the route of cuts to service, it will not stop at Sheppard. Who’s to say that 15 minutes won’t then be used as a yardstick on the Yonge line? “People can stand.” the apologisers will say. Streetcars would be next. “Does the Beach need better service then Mimico?”, some will ask. Awful discussions will ensue. Once we start looking at service cuts on the scale of saving $100 million, every neighbourhood not well connected politically will suffer.

    Shoulda done a fare hike.

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  27. The quotes from Commission Chair Karen Stinz I heard on CBC this morning are disturbingly predictable. She talks about how “the TTC, like all city agencies, will have to deal with a 10% funding cut.”

    Certainly it’s the job of the Commission, and its Chair, to deal with difficult circumstances. But first of all they should be working to keep the TTC out of the difficult circumstances to begin with. And they should be transit commissioners first. Something that Ms Stinz is not: what’s the last time she stepped on a transit vehicle to go somewhere, rather than as a PR exercise?

    Steve: Actually, Karen Stintz does use the TTC regularly including yesterday morning. I may not agree with her politics, but she can’t be criticized as a motorist who doesn’t ride transit.

    Karen Stinz is less the chair of a transit commission than Rob Ford’s metaphorical trained seal and mouthpiece. On command, she claps her metaphorical flippers and makes the appropriate barking sounds. Her obligations to Mayor Ford appear to infinitely outweigh her responsibilities to the people who took close to 500 million rides on the TTC in the last year.

    Steve: More to the point, if we are going to have fare increases and service cuts, we need to have an open discussion about the options, rather than being presented with a fait accompli by staff who cobble together a bunch of cuts and claim that their thorough analysis “justifies” what will happen. We also need to recognize that Rob Ford’s pledge not to cut services is in tatters. I happen to live in an area of the city that will still be tolerably well served by transit, but many do not. I hope that all those who are muttering “I never voted for this” start shouting, and that Councillors who owe their political existence to the Ford machine will see how unhappy their constituents are.

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  28. According to my calculations, the Ford cuts alone will need to be 12% of all departments (including the TTC) and once you add in the Hudak downloads, we are looking at a $4.50 a ride fare, or, equivalent service cuts, by 2015.

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  29. I doubt they will cut service again.. in fact I expect them to restore service levels to what they were prior to the cuts made early this year and increase fares.

    Personally I believe that if they raise fares now the city (notably Rob Ford) are going to get a major backlash from it.. after all they cut service to save money and now they want to raise fares and provide less service when they could have just kept service the same and raised fares to begin with.

    All I can say is expect a fare hike and restored service levels.. it would be political suicide to raise fares now given that they just cut service.

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  30. OgtheDim said about the Sheppard line, “Make it two and you get a service delivery of every 12-15 minutes. People won’t use it and then it becomes even more tempting to mothball bits and pieces.”

    Really?!? Why spill 10W30 on that slope when hyperbole makes it slipperier?

    We in Toronto have this belief that rapid transit must not ever operaate less frequent than about 10 minutes. In so many other cities, many metro and LRT routes operate with frequencies as low as 15 minutes or worse (“worse” is usually restricted to branches or interlining that may have 30 minute headways on the separate parts, but provide 15 minute headways on the combined part of the routes).

    Is it reasonable to think that someone who takes a suburban feeder bus that runs on 20 or even 30 minute headways to a subway that only has a 15 minute headway will suddenly find the subway useless? I don’t think so.

    Sure, one can always find a few situations where 15-minute suburban subway frequency would be a problem, but the bigger picture has to be taken into account. Certainly removing half the service on Sheppard in off-peak times will not be a huge savings, but we really have to set aside certain “sacred cows” and carefully look at small ways to save what limited funding there is. To do otherwise is to risk a willy-nilly hatchet job.

    Steve: The folks driving the trains are small change in the overall manpower required to operate the subway. If you cut two trains, you save four people, but you still have the Station Collectors, Supervisors, and all of the standby maintenance staff. The reduced service would probably have no effect equipment maintenance cycles (ie: you wouldn’t be able to change the number of days between various scheduled maintenance tasks for the trains), and you wouldn’t save anything in the shops.

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  31. Hi Steve, I seem to recall that during tough economic times, many businesses curtailed their marketing departments and their advertising budgets. Now, wouldn’t it be a laugh, because of financial constraints, the TTC had to axe their new and much balleyhooed customer service department that was just started up by the current administration? Just a thought!

    Steve: As I noted in my article, there is no explicit provision for any new spending on customer service. How many bus routes will be cut so that the TTC can put a smiling face on the result?

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  32. How can Rob Ford control outside forces to help cut costs 10%? The price of gasoline went up 34% in one year. Does he have the power to cut gasoline prices 10% so that the police, TTC, fire, etc. will help to reduce their overall costs 10%? At the end of his 4 year term, I’ll like to see if he is able to do so.

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  33. There are a bunch of issues here, the first is, is the TTC part of the city or not? If it is, then it should simply be a city department, which would save many millions in duplication, where the city has people to do something and the TTC has people that do the same thing. For example, security, if the TTC is a city department, then security can be handled by the TPS another city department, and so can trash pickup in stations, and a whole collection of other things.

    Paper schedules are not a bad idea, except that so many times, the engineers that make up the schedule, don’t know what traffic and conditions that bus puts up with, sometimes though it’s the driver, there should be incentives for drivers to stay on time, or penalties for those that don’t and if it’s not possible to stay on schedule, fix the schedule.

    Steve: There are parts of the TTC that overlap the City, but you are assuming that there is surplus workers, or work hours, on both sides that would lead to a lower combined staffing level than in two separate organizations. Policing of the subway has already been transferred to TPS, and the TTC’s own Transit Enforcement Officers deal with simpler types of activity that do not require arrest powers or the use of force. There is certainly a functional overlap in areas such as HR, payroll and financial management, but it’s a big jump to assume that the City staff performing this work have free time on their hands to absorb the TTC’s business too.

    The biggest cost of the transit system is the provision of service, and this has no functional equivalent at the City. Any savings from amalgamating or transferring functions would be a comparatively small part of the overall budget, and this would be a one-time saving. I’m not say don’t look at possible savings, but remember that we will be back at this exercise with the 2013, 2014, … budgets and you can only make that type of saving once.

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  34. I heard that in a project there are 3 dependent variables: quality, schedule, and cost. Setting any two of them determines the third.

    I’m not sure what the equivalent in transit service is, but someone will come up with them.

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  35. To be honest, I would like to know how the TTC is always in a budget issue year after year.

    I know it is a large agency. But come on. Mississauga Transit, Brampton Transit, YRT, GO Transit, etc. All these systems don’t see their costs rise by mega amounts year after year, putting them in major budget issues like the TTC.

    There is something wrong here with the TTC budget. I understand there are wage increases. But we should not be facing a budget each and every year which is $50 to $100 million in the hole all the time.

    Maybe we should find out what YRT, MT, and all the others are doing to maintain balanced budgets.

    Steve: First you should check which of those 905 transit systems CUT service this year in response to funding reductions by their local councils. The TTC’s operating budget is roughly $1.4b of which $1b or so is labour and benefits costs, and the rest utilities, materials, supplies and services purchased from others. Labour can be expected to go up something like 2.5%, and that’s $25m. We already know that diesel fuel is going up by one third, and that adds $30-40m. Other cost increases which are not under the TTC’s control will add to the non-labour component. There will be 3% more riders next year, and this requires more service. Even if some of the added riding can be accommodated within the existing operation, we’re probably looking at about 1.5%, and on that base of $1.4b, that’s about $20m. The 905 systems have the same cost pressures, only at a lower scale, and they operate in a political environment where cutting transit affects so few voters that councils can get away with this approach.

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  36. Departments have been asked to reduce their budget by 10%. For the TTC, does this mean a 10% reduction in subsidy (which could be met by higher fares), or a 10% reduction in actual spending (which could mean ~10% less service).

    Steve: Subsidy. This translates to about $43m, or about 3%. The problem we have is that there is also an extraordinary increase in diesel fuel pricing that will cost $30-40m in 2012.

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  37. Steve says: Actually, Karen Stintz does use the TTC regularly including yesterday morning. I may not agree with her politics, but she can’t be criticized as a motorist who doesn’t ride transit.

    I apologize to Ms Stintz for making such a broad accusation without checking the facts first.

    However, it can also be a question of when and where the Commissioners ride. Riding the subway between Queen and Eglinton, outside of peak periods, shows the system close to its best.

    Steve: She was on during the peak period in the middle of the massive service screwup caused by the lightning strike on the signal equipment at Wilson Yard the night before (the trains did not all get into service on time for the peak period), and was present when a passenger fainted on the overcrowded train. This was reported at the Commission meeting (along with a discussion of the signal problem) and by the Star.

    Enduring a standing-crush-load ride from Finch to Dundas in the morning rush, or transferring at Bloor and Yonge in afternoon peak when trains are delayed, would give a different picture. As would standing on the corner of Kipling and Dixon at 11 PM in winter waiting for a bus, or being stuck the sketchier stations such as Kennedy at night. Or riding an ALRV that has a day’s junk of newspapers and food wrappers strewn about, and juice bottles rolling back and forth. Oh yes, and the unwashed person that got on via the back doors and is now muttering to the voices in their head….

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  38. Calvin Henry-Cotnam says:
    “Is it reasonable to think that someone who takes a suburban feeder bus that runs on 20 or even 30 minute headways to a subway that only has a 15 minute headway will suddenly find the subway useless? I don’t think so.”

    So because people take longer to get there its somehow OK to cut the service standard? If we want people to take a subway, then, like it or not, expectations are that a train will arrive earlier then every 12-15 minutes. Otherwise, people will find an alternative and in the inner suburbs, that means cars.

    As for my hyperbole, the Sheppard line is almost yearly suggested for mothballing – usually by a downtown councillor trying to make the news during a TTC budget crisis. It’s an easy target but if the TTC went down that route, there would be a political demand for some sacrifices in the downtown – cut the eastern part of the 506, for example.

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  39. Steve,

    Just a quick follow up to your comment in the post about the pension fund solvency. This has been the primary topic of discussion in the current (and glacial moving) contract negotiations. The TTC, the Unions, and the Pension Fund Society have had discussions with the Provincial regulators and have determined that a re-structuring of how the PFS is set up and administered will allow it to solve the solvency issue and move forward to reduce its impact on the TTC financials.

    The TTC has approved these changes at the April 6, 2011 Commission meeting. The three Unions have approved the changes. The final step is for the PFS members to approve the changes at its Annual General Meeting on June 19. The PFS covers ALL TTC employees (unionized, non-unionized). Once the PFS approves the changes to the structure, the solvency issue should remove itself from the TTC’s financial problems.

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  40. One upside of the lightning strike might be a re-evaluation of dependence on Wilson Yard and the need for another major yard in the system as a prerequisite to a Richmond Hill extension – perhaps in the hydro lands at Yonge/407 if the existing towers could be replaced with an alternative transmission path like a superconductor trunk line as are being rolled out in New York. The problem with that site would be likely objections from the cemetery across the road unless the yard was completely roofed over and sound insulated.

    Steve: The TTC has a project in the capital budget, not yet funded, to pre-build part of the Richmond Hill subway up to Cummer as a three-track structure and use this for storage of at least ten trains. As you can easily figure out, this would have to be built as cut-and-cover, and I don’t want to imagine the chaos north of Finch Station while that proceeded.

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