Updated November 26, 2013 at 5:55 pm:
I have written a commentary on the City of Toronto budget as it affects the TTC on the Torontoist website.
For further information please see:
I will add comments here on some of the details at a later date.
Original article from November 13:
The TTC will discuss its 2014-2023 Capital Budget at its meeting on November 18. At this point, I have not had a chance to review the detailed budget books and will present only the highlights in this article. After the meeting and when I have additional info, I will update this piece.
The capital budget lays out projects on a 10-year scope because spending will occur over many years. The City of Toronto and the TTC Board need to see the broad view of capital needs in order to plan for borrowing and also as a basis for lobbying other funding partners for assistance.
The budget as a whole is divided into items that are “above” and “below” the line. Those that are “above” have funding either as specific projects (e.g. the Spadina subway extension) or out of the projected yearly capital allocation that the City plans to make (e.g. many ongoing capital maintenance works). Those that are “below” have no funding, but they are still considered essential to the future of the TTC system and they are prime candidates for any new money that may appear.
It is worth noting that the entire “below the line” group has a value roughly equal to that of the Scarborough Subway. This is an unfortunate example of how politicians are happy to spend small fortunes on a single project for electoral advantage, but leave necessary work out in the cold because no individual project offers quite the opportunities for fine speeches and ribbon cutting ceremonies.
In the short term, the capital budget is “funded” – that is to say, the amount of money expected from various sources in 2014 is enough to pay for the work planned in that year. In both 2013 and 2014, the Capital Budget ran a “surplus” in the sense that more money was available than actually needed. However, this is a short term situation caused by timing differences, and the situation quickly reverses starting in 2015. (See Appendix C on page 36 of the budget report.)
Over the five years 2014-18, there is a shortfall of almost $833m in funding. In the next five years, 2019-23, the situation is even worse because of planned reductions in the level of City funding, and there is a $1.856b shortfall. The TTC has a 10-year capital requirement of just over $9b, but a $2.7b shortfall in money to actually pay for this work. A detailed description of the unfunded projects begins on page 12 of the report.
Because of lead times involved in procurement, many of these projects will come to the Commission and Council for approval in 2014, an election year. Readers should note that the amounts shown above only cover costs that fall within the ten-year window. For example, the T1 subway car replacement would only incur spending at the end of the cycle, and the total project commitment would be considerably higher ($1.22b according to the detailed project budget sheets at page 27 of the report).
Notable among these projects are items to address growing demand on the transit system:
- 135 additional buses
- 60 additional streetcars
In the “above the line” budget, there are 60 new subway cars (10 trainsets) to handle riding growth by reducing headways. No specific provision is made for additional yard space to house these trains which are proposed to be acquired before 2017 with project approval (presumably as an add-on to the TR order) in 2014 (see page 27). All available space including reactivation of Vincent Yard (east of Keele Station) will be consumed as the current order for TRs including the Spadina extension fleet arrives.
The added buses will be accommodated in a below-the-line second phase of the McNicoll Garage project. The 60 streetcars will consume all remaining space in the three carhouses (Leslie Barns was deliberately oversized to allow for a larger fleet.)
Without question, fleet expansion on this scale will affect future operating budgets. Toronto has lived through a few years where we could pretend that transit costs were contained, but this fiction will not be possible in coming years. The TTC has yet to publish any estimates of the budgetary effects of coming expansions including the Spadina extension and service improvements generally.
All of these capital requirements are over and above anything that is built as part of The Big Move by Metrolinx. Queens Park is fond of telling us at every opportunity how much they pay for transit in Toronto, but the only non-project funding is the capital portion of the gas tax (about $71m/year). Many funding programs (see Exhibit 1 beginning on page 3) from Ottawa and Queen’s Park have now wound down.
The Metrolinx Investment Strategy talks of a 25% share for municipal partners out of whatever revenue flow it might produce. At the originally discussed $2b/year, this would leave $500m/year for municipal projects of which Toronto’s share would, at best, be $250m. Of that, a good chunk is intended for works other than transit projects. Finally, of course, it is doubtful that Queen’s Park will actually try for $2b/year. All-in-all, a visit from more than the Tooth Fairy will be needed to deal with the budgetary shortfall.
The TTC has flagged the need for much greater support in its capital spending, and operating budget needs are lurking just out of sight. How will the TTC Board and Council react to these requirements? Will we hear all about “gravy” and “tax fighting”, or will we finally see politicians with the backbone to fight for better transit throughout the city and the spending needed to provide it?
This article will be updated following the budget debate at TTC.