This morning, while TTC Chair Karen Stintz, Mayor Ford and other luminaries were dedicating the inaugural run in service of a Toronto Rocket subway train, the agenda for the July 28th Toronto Executive came out. The city’s “core services review” has reached its agencies, including the TTC, and the consultant’s findings can be found starting on pdf page 161 of their report.
The premise of the city-wide review is that there is some sort of “standard” above or below which services are provided. In some cases, reference is made to other cities, but in the case of the TTC, the “standards” appear to be pre- and post- David Miller’s mayoralty. If something was done in the “Ridership Growth Strategy”, it is by definition “above standard” and up for elimination.
This is a strange way to evaluate services especially in the North American city lauded for the quality of its transit system and the economic benefits this brings. Never does the consultant address the value of good service, only its cost.
The consultant, KPMG, show their colours on the title page with the double-entendre corporate motto “cutting through complexity”.
Service Level Cuts
The recommendations for service provision state:
There are opportunities to reduce service levels, predominantly in areas recently increased in response to the Ridership Growth Strategy –crowding standards, minimum service frequencies and late night services.
KPMG may be new to this file, but the Ridership Growth Strategy is hardly a “recent” creation as it dates from March 2003. RGS was a deliberate policy to make transit more attractive to potential riders. One of the most common complaints from transit-resistant users is that their car is more convenient and uncrowded. While we will never duplicate an automobile’s comfort and privacy with a bus, streetcar or subway, we shouldn’t treat transit riders as third-class citizens especially when they are paying 70% of the cost of the service they ride.
KPMG was silent on capital financing issues as they were only reviewing the effect of transit on the City’s operating budget. In the process, they note that capacity improvements for the subway are in progress, but fail to mention or analyze the cost, timeframe and risks of current TTC plans.
As to service quality, we see yet again the TTC “standard” of .23 passengers per dollar spent cited. I have written before about the folly of this measure as it has not been adjusted for inflation since its invention over a decade ago. The TTC claims that it is “dimensionless”, and they are wrong. Getting them to admit this, or to correct their methodology, is an almost hopeless cause. The problem with this number is that, as a standard, it becomes harder and harder to justify service improvements based on a cost/revenue calculation as one dollar buys less and less service that must get the same number of riders to be “acceptable”.
KPMG notes that Toronto has better financial performance and transit market share than other large North American cities, but makes no reference to the quality of service provided elsewhere. How can we have a “standard” without reference to system use, or to the benefits and costs?
Notable by its absence is any reference to subway frequency standards. Current TTC practice runs trains every five minutes whether they are needed or not, and never shuts a portion of the system for low usage. Oddly enough, there was a time when a wider maximum headway was permitted, but this was changed back to the current 5 minute value before Mayor Miller’s time. KPMG appears to be selective in the “standards” they consider.
Vehicle loading standards were improved under RGS for two reasons. First, if the target peak hour average uses all of a vehicle’s capacity, then there is no room for the inevitable variation in demand. Second, the scheduled capacity is rarely the capacity actually provided when short turns and bunching are taken into account. Off peak service on many routes runs infrequently, and at times only somewhat related to the posted schedules. The least the TTC can do is to aim for a seat for most of its off-peak riders.
Nowhere does KPMG address the much more fundamental “resource management” issue of service provision and quality. I have written at great length about the problems of service management as practiced by the TTC, but this falls on deaf ears regardless of the political flavour of the Commission. Providing better service with the resources you have is a fundamental tenet of management reviews, but this topic is completely missing from KPMG’s report.
KPMG suggests that night services could be discontinued or run as a premium service to reflect their cost of operation.
Transportation services at night are considered discretionary, although they are provided by other large municipalities. Service level rated S, as 30 minutes is a reasonable schedule, comparable with other large jurisdictions that provide similar service.
“Considered discretionary” by whom?
KPMG appears utterly unaware that some of the night routes meet the daytime service criteria. More generally they do not even review how the night network fares against the recently minted standard for cutting lightly used services (15 riders per vehicle hour).
Night service exists not just for the poor shift worker who occupies a low position in the new cost-effective business model at City Hall, but also many entertainment activities that go late into the night and count on transit as a safe way to take their patrons home. The idea that night service is provided simply because it is “traditional” rather than “essential” belies a view of public transit quite foreign to Toronto’s citizens and business community.
Nowhere in the discussion does KPMG address access to transit, the walking distance and waiting time to obtain transit service. Already we know that the TTC neglected this as part of its marginal service review and has created large blocks within the city bereft of late-night transit.
These changes would reduce convenience and travel flexibility for some customers, and would reduce total ridership levels. Elimination of Blue Night network of buses would be a major inconvenience to a relatively small number of customers. Raising/doubling of fares on Blue Night routes would be an alternative way to offset high costs of service delivery.
[The] majority of service levels are established through an internal TTC standard. Opportunities may exist to lower service levels/standards for these services to reduce costs. However, lowering of standards may impair safe and efficient operation of the transit system (this may also apply to Wheel-Trans). Further analysis may be required as part of the TTC efficiency review.
Regular users of night services are likely to have passes, and it’s hard to say when the “night fare” would kick in. Does Sunday morning from 6 to 9 am, when the TTC chooses to keep the subway closed, count as “night” service? Does a Queen car making its way from Neville to Long Branch stop at, say, 2:30 am to demand a supplementary fare from whoever is on board? KPMG really does not understand how fare systems work, or the fact that late night service actually runs well beyond 2am, not 1am as cited in their report.
Quite bluntly, KPMG was lazy — they took the easy pickings, the RGS changes brought in by the previous regime, but ignored the broad question of the function transit should have in a city.
Fleet & Infrastructure Management and Repair
Although these areas consume a great deal of resources, KPMG is silent on whether these functions are provided cost-effectively. Any discussion of potential cost savings must deal with basic criteria:
- what is a reasonable standard for provision of any function,
- does this standard requires more or fewer staff, or different staff qualifications, to provide it.
Answer these questions and we can get into issues like overmanning, pay categories, staff management and supervision, and outsourcing.
This set of activities includes Legal, Claims, Training, Finance, and IT services.
Opportunities may exist to merge some of these with comparable functions at the City, but the TTC is a large organization. Indeed, some of its administrative groups may rival or exceed their opposite numbers within the City government.
Of particular note is “training”. For many companies, this is a generic function conducted by hated members of the Human Resources department or consultants hired for the purpose on generic topics applicable to any organization. However, a transit system has a unique requirement to train technical staff be they drivers or maintenance workers on the peculiarities of transit operations, equipment and infrastructure.
Outsourcing Service Provision
KPMG suggests that some transit services could be outsourced to a private contractor citing the Region of York as an example. Given the labour relations implications of such a move, this is a longer-term target. What is missing from the discussion is the recognition that York (and others) started from a position where creation of a transit system would require significant investment for what would be a comparatively small operation. The TTC is a much different situation. Moreover, KPMG does not address the capital side of the balance sheet.
Some types of facility maintenance are generic (groundskeeping, security, cleaning) and in theory could be provided by an outside contractor. While this and other generic outsourcing may be possible, what can prove interesting is the definition of a standard to which a contractor may perform. Will the TTC manage contractors any better than their own in house operations? Will cleaning stations to a level of 80% (whatever that means) be an objective, measured criterion complete with performance penalties, or will it be a subjective standard met with a wink and a nod if things are not quite right?
Some of the KPMG suggestions are common to the “conventional” transit system such as consolidation of maintenance and back office functions with other agencies. WT is already part of the much larger TTC and draws on its services. The available savings may be small, except to the extent that there are consolidation benefits for the TTC as a whole.
KPMG suggests that the need for WT may decline:
With increased accessibility of regular transit services, there may be opportunities to narrow the range of eligible users, perhaps considering seasonal issues. Helping users become familiar with regular transit may also reduce requirements. (Development of an accessible taxi industry could also help).
Although the surface fleet is becoming accessible, there is a very long way to go with the subway, and the date for an accessible system recedes in the future thanks to capital budget cuts. The phrase about “helping users” is condescending and presumes that people don’t know what services are already available, and only this ignorance prevents them from leaping onto the nearest bus or subway train. As for the taxi industry, it is well known that this is a big problem for the TTC because taxi owners don’t want, or cannot afford, the investment in accessible vehicles.
Among the options for savings is:
Review eligibility criteria for Wheel-Trans participants to make it stricter, thereby lowering total demand.
[This] could marginalize individuals with non-severe disabilities having mobility issues.
Oddly enough, KPMG observes:
Efforts over the past two decades to improve accessibility of regular TTC services has limited the growth in requirements for WheelTrans, but the service will still be needed as most users cannot access even accessible regular transit services, at least in some circumstances. [Emphasis added]
Like many other reports in the KPMG Core Services Review series prepared for Toronto, there is a strong thread of picking obvious targets without a real understanding of the implications the cutbacks may have or the broader policies, social and political, in which past decisions were taken.
Earlier this year, there was a huge battle over cuts to many bus routes and hours of service deemed to be “poor performers”. The context was the need to free up budget headroom for service improvements in the fall. Indeed, September will see better service on many routes in response to crowding. However, there are 25 routes where service improvements are justified by demand, but where there is no money left in the budget to provide it.
Unlike most other city services, the TTC generates the majority of its operating budget from user fees. We already know that the 2012 budget will include many demands including:
- inflationary increases in materials
- an extraordinary increase in fuel cost (35%) for diesel buses
- a 10% cut in subsidy funding from the City of Toronto (about 3% of the budget)
- an as-yet unknown labour cost increase (likely at least 2.5% based on other essential services)
- the need for more service to cope with riding that will crest the half-billion mark for the first time in TTC history
There may be savings to be had, but these will not permanently cap the increase in TTC costs. These may be one-time savings that cannot be repeated in 2013 and beyond.
More service, more riders means higher fares or greater subsidy or both. A decision to stop serving transit demand because Toronto cannot or refuses to afford it runs counter to the city’s history and even Mayor Ford’s own Transportation City program.
Finally, this is a test of the independence of the TTC Board. If choices are made from the KPMG menu by Toronto’s Executive Committee or by Council, then the TTC Board may as well pack up and cede control. The TTC is doing its own efficiency review, but this has not yet been published. Are there ways to limit costs or to provide service more effectively? Are KPMG’s proposals realistic and an accurate read on where savings can be found, or are they the easy options for a consultant telling a client just what he wanted to hear?