The TTC Board met on May 27, 2015 with an unusually rich agenda that took the public session straight through from 1:00 to 7:30pm, except for a break of roughly half an hour to discuss some items in camera. Rather than the relentlessly cheery, swift, but vapid meetings of the ancien régime, this one had some substance.
This article deals with:
- TTC Governance
- TTC and City Joint Transportation Initiatives
- Draft Financial Statements
- CEO’s Report
The so-called “citizen” members of the Board were appointed for new terms at the May Council meeting. Bios of the citizen members are included in the linked report.
This started out as something of a shambles when the committee vetting candidates, chaired by Deputy Mayor Minnan-Wong, managed to propose a slate of four white men leaving Councillor Shelley Carroll as the only woman on the Board. This was corrected by having Maureen Adamson, former Deputy Chair of the Board, carried over for another term.
Alan M. Heisey replaces Adamson as the Vice Chair for the new term of the Board. (Council appoints the Chair, and has directed that the Vice Chair must be a citizen member.) Heisey served in the previous term and takes an active interest in TTC matters.
The gathering of the Board has actually started earlier in the day with a meeting of the Audit Committee which considered several reports, many of which were also on the full Board agenda. As the meeting wore on into the early evening, one important documemt, the CEO’s Report, received only cursory attention. The Board suggested that this report be placed early in the agenda order at future meetings, possibly with only bi-monthly but more detailed reporting.
Another report on the agenda concerned the 2016 budget process. This was the report containing the claim that the City had asked the TTC to cut its subsidy request by 2% finding “efficiencies” going into 2016. I have already written about this in another article. In response to the controversy over this issue, CEO Andy Byford emphasized that any cuts would not be at the expense of front line operations.
The Board decided to strike a Budget Subcommittee that would participate in budget work on a more detailed level than the Board has recently. However, the first draft of the Capital and Operating budgets must go to the City Manager in mid June for the beginning of the 2016 cycle. Normally, this would come to the Board’s attention earlier in the year, but the election of 2014 and the beginning of a new Council delayed this. Frankly, I also believe that the need for the Board to distance itself from the Mayor and to set an independent agenda is becoming obvious.
A second subcommittee of the Board was also created to deal with Human Resources and Labour Relations.
With three subcommittees, this will be a much more involved Board than we have seen in past years.
Stephen Buckley, General Manager of Transportation Services, was invited by Chair Josh Colle to make a presentation about the joint work underway by his department and TTC staff. This is the first of a series of cross-agency items that will come forward at future meetings including a presentation from City Planning and from Metrolinx.
Disclosure: I have provided consulting services to the TTC and City for the analysis of vehicle operating data which forms part of these initiatives.
Squeezing more capacity out of the road system is an important issue together with understanding where the problems really lie and how much, if anything, can be done to improve things. It was no secret that in the past, relations between the City’s Transportation Services (who are mainly concerned with roads) and TTC staff were not exactly cordial, especially after the departure of a pro-transit Mayor, David Miller. The relationship is changing with Buckley and the TTC’s Chris Upfold working to improve not just co-ordination, but a joint approach to improving transit and traffic.
Page 9 of Buckley’s presentation shows the framework for these initiatives which includes:
- the creation of a Joint Executive Committee to address strategic issues,
- conducting a study to identify options for improving downtown streetcar operations,
- revisiting transit signal priority policies and identifying improvements, and
- development of policies to guide decisions that affect surface transit operations.
This work is still in progress with some improvements to date on King Street, and recommendations to follow for Queen, Dundas and College/Carlton.
Transit mode share for commuting in Toronto (page 10) is good, although Chicago and Philadelphia make interestring comparisons because they are not as desparately far behind us as some might think. To put this another way, we are a solid leader in major, mid-sized cities, but we have a long way to go to reach New York assuming that is even possible with Toronto’s relatively dispersed population and job market.
An important change for the City is that there is now a Manager of Surface Transit Operations, a single point of contact and responsibility for issues related to transit.
Delay studies on downtown streets have led to changes in peak hour restrictions in some locations. Some of the delay data showed clearly that transit travel times in some places were higher on the shoulders of the peaks (when parking was allowed) than during the peak itself. In others, changes in overall traffic flow (such as the availability of access to the Gardiner Expressway) could shift the location of congestion and affect transit vehicles. Understanding how various factors interact will be an important step in making improvements, or at least in anticipating the effect of planned or unplanned changes.
Work is underway to improve traffic signalling in various ways including:
- retiming of corridors (mainly in the suburbs) to improve traffic flow and reduce delays for all vehicles including transit, and
- implementation of a new generation of signalling technology that can better adapt to changing conditions.
There is also hope that the TTC’s new CAD/AVL (Computer Aided Dispatch/Automatic Vehicle Location) system can be interfaced with the City’s signalling system to provide transit priority when and where it is most needed. I have my doubts on this as an essential pre-requisite is a consistent philosophy about just how surface transit routes should be managed and what goal the signal system might assist. However, the idea is worthwhile if only because it might force discussion of this issue.
Events that remove a substantial portion of a road’s capacity can have a severe effect on transit. These include illegal occupancy of curb lanes, and construction projects on a short term (utility work) or long term (building construction) basis. To the degree that these can be reduced or eliminated, transit and traffic flow in general can be improved.
There are two sources of data on vehicle movement: TTC’s own vehicle location system, and tracking data for automobiles based on GPS data from cell phones. Delay locations for the TTC are not necessarily the same as for autos because transit vehicles must deal with stop service time, and streetcars can be delayed by turning movements both by autos and by other streetcars. Finding problem locations for both types of traffic allows changes to be made where they are most needed.
Page 22 shows a chart taken from my analysis of the King car that focussed on three changes to the operating environment in 2014: increasing the level of fines, extending the peak-hour clearance times, and the onset of construction on the Gardiner Expressway. The chart on page 22 shows the before and after data for the route westbound between Jameson and The Queensway. The first two changes did not apply to this segment of the route (the format of the chart is common to the analysis of all segments in the study), but a big jump occurs when some traffic is forced off of the Gardiner onto King Street. Detailed study shows that this delay occurs east of The Queensway where the signals do not have enough green time to handle the flow. Other parts of the route showed varied effects by location and by time. In some cases there was no change at all. The moral is that blanket changes could be excessive in parts of a route, or as a middling “compromise” could be ineffective in the truly problem locations.
Pages 23 and 24 show how substantially the change in conditions can affect transit times. The data show travel times westbound from John to Spadina in the weeks before and after Victoria Day in 2014. The values are particularly high on three days corresponding to a period when the TTC attempted to operate the Queen car diversion around construction at Victoria via King and Spadina. This was at the same time as all Spadina cars were looping via Adelaide, Charlotte and King due to construction on Queens Quay.
The intersection could not handle the extra traffic, especially the turning streetcars, and severe delays were the result. This problem vanished when the Queen streetcars were routed westbound up York Street to Queen. This is an example of how an event at one location can have an indirect effect elsewhere, and of an intersection that was pushed beyond its capacity by a change in traffic patterns. Problem locations like this need to be well understood so that they are not overstressed.
Short-lasting events can trigger major problems whether they be accidents, parades, festivals or media takeovers of road space. Better co-ordination between the TTC and City should allow for better advanced planning, and for improved management of traffic when they occur.
The financial statements for the TTC, for the wonks among us who track this material at a detailed level, are in a format different from the way numbers appear in the TTC and City budget papers. There are several reasons for this, and it is important to keep them in mind when citing figures from one source or the other.
Under Public Sector Accounting Standards, there was a major change a few years ago in the handling of capital assets – things like vehicles, track, signal systems, etc. – which are usually purchased with subsidies from other governments and which have a lifespan measured in decades. Before the new standards, the TTC recorded only capital assets it actually paid for, and everything else netted out as a capital cost offset by a capital subsidy. With the new standards, the capital asset is depreciated in the same manner as for private sector companies, and the capital subsidy is treated as revenue over the life of the asset.
With the TTC, an agency with very large pool of capital assets, the accounting transactions for capital dwarf the numbers in the regular operating budget, and the consolidated figures bear no resemblance to operating budgets and subsidies usually quoted in political debates. A short example to explain what is going on here:
- Suppose that the TTC buys 100 buses for $65-million, and the money all comes 75% from the City and 25% from Queen’s Park. The money is paid out by the two governments when the buses are acquired, but it doesn’t sit in the TTC’s accounts for long and passes straight through to the manufacturer.
- At this point, the TTC has two balancing items in its accounts: the buses with a book value of $65-million and deferred revenue of the same amount. It is “deferred” in the sense that it has been received, but will not be booked until future years.
- Over the lifespan of the buses, say 15 years, their value will decline, on paper, by 1/15 each year and an equal amount of deferred revenue will be shown as “income” even though the money has already passed through the TTC’s hands.
- Any statement showing relative share of subsidy “revenue” that is based on the deferred values will show income from two funding partners who may no longer be contributing anything, but such is the magic of accounting.
A further wrinkle shows up in the operating accounts because some TTC expenses for the current year will not actually be paid out until future years. A good example is post retirement benefits which are earned during work years, but actually paid for during retirement. The City holds back the value of these payments from its subsidy payments to avoid having a pile of reserve cash building up in TTC accounts to cover future costs. As the TTC actually needs the money, the city pays out the deferred subsidy payments.
Both of these mechanisms make for difference between the current year view of the budgets (the ones we are used to seeing) and the reported values in the financial statements. These differences are reconciled by some of the notes in the statements.
A few items are worth noting:
After many years of losing money, the Bay Street Bus Terminal is finally showing a profit and the debt owed to TTC by its subsidiary company (the last vestige of Gray Coach Lines Limited) is starting to be paid off. This change of affairs came about because TTC got out of the business of running the terminal and leased it to a private operator. If this debt, which now sits at about $3.5m, is not paid off by the time the terminal is eventually sold for development, the balance will be paid out of the sale proceeds. (This item is buried in the detailed accounts at the end of the statements.)
The many and varied capital subsidies are discussed in Note 14 of the statements which begins on Page 30 (which is p35 of the PDF). This shows the few remaining reserve funds in the TTC accounts. I discussed these reserves in some detail in a previous article tracing the flow of subsidies and reserves from 2000 onwards. By the end of 2014, there are only a few reserve accounts left:
- Provincial Gas Tax contributed $163m in 2014 of which $91.6m went to the Operating Budget and the remaining $71.4m to Capital. When the TTC says that project “x” is supported by Queen’s Park, this is often simply a matter of which capital projects the gas tax was allocated to in TTC accounts. Only when Queen’s Park pledges project-specific support such as the Spadina extension or the new streetcars can it be said to be actively funding an individual project. The gas tax reserve tends to have little or no money in it at yearend and it is simply a pass-through account for the revenue.
- The Canada Strategic Infrastructure Fund (CSIF) has been paying for, among other things, the federal share of the Presto program. This is now a 100% Metrolinx project.
- Move Ontario 2020 (MO2020) money was intended for a variety of projects, notably the Yonge Subway signalling upgrade.
- A separate Move Ontario trust holds the provincial contribution to the Spadina subway extension. Other governments operate on a pay-as-you-go basis with capital subsidies rather than making block transfers up front.
- The CSIF and MO2020 reserves will be fully drawn by the end of 2016. At this point, there will be no remaining accounts holding capital subsidies transferred in advance of actual expenditures except the trust fund for the Spadina subway extension.
The depletion of these reserves leaves the City of Toronto more exposed to ongoing TTC capital needs, and is a major reason for the funding shortfall in the capital program. Bulk payments received from other governments when times were good, or at least when they wanted to appear as sources of “stimulus funding”, have been used up, and the City must now finance much of the TTC’s capital needs on its own.
Discussion of the CEO’s Report came at the end of a very long meeting which included debate on the never-ending issue of Wheel Trans taxi contracts, an agenda item guaranteed to skew the time spent on every other matter. Some board members complained that an important basis for review of the transit system as a whole wasn’t getting the attention it deserved, and at future meetings this report may be prioritized with an early spot.
System performance for headway reliability continues to be reported on the basis of ±3 minutes to scheduled headway, a metric that gives meaningless, high scores for reasons already covered on this site. New metrics are supposed to appear later in 2015.
Changes to subway operations are reported to bear fruit in more reliable service, although this has not yet shown up in the tracking charts that run only to the end of March 2015. A rebound of the reliability index in March is caused by the arrival of Spring.
Revisions include adding running time to the schedule and using “double step backs” of crews at terminals. This guarantees a proper break at the end of each trip with crews arriving on train “n” dropping back to “n+2” for their next trip. This avoids delays caused by the inevitable calls of nature at the end of a long trip, a problem that will only get worse as lines are extended.
Technical problems with the power collection gear on SRT cars required that line to operate below its top speed since February, and the TTC hopes to have this at least partly resolved in time for the Pan Am Games in July.
On the streetcar system, reliability through the winter was very bad, and the index fell considerably, with February being particularly bad. Until stats from April and beyond are added in, we will not know just how well the fleet has recovered from weather-related problems.
The TTC continues to wrestle with major problems and has restructured both the Spadina Extension (TYSSE) project and the Automatic Train Control (ATC) conversion to improve management controls and, in the latter case, to eliminate technical problems from a complex, multi-vendor implementation. Beginning with the June Board Meeting, there will be a quarterly update on the status of the ATC project.
(The major subway outage on June 8 occurred after this meeting. It illustrated the problem of unknown risks lurking within TTC systems that might be discovered only when something fails. I will leave discussion of that until there is more detail about both the incident and the TTC’s reaction to it.)
Ridership for 2015 is now expected to come in at 540-542 million, down from the 545m budget figure due mainly to the effects of the severe winter weather. This reduces projected revenue, but some cost areas will come in under budget resulting in no net increase in the operating subsidy. The amounts involved are all under 0.5% of the total budget.
The Flexity streetcar contract with Bombardier is supposed to get onto a better footing later in 2015, although such statements are becoming more difficult to believe.
Bombardier is currently more than 50 new streetcars behind schedule from the approved contract schedule. The TTC received a proposed recovery schedule from Bombardier on February 19, 2015. Further to discussions with TTC staff, a revised schedule was issued April 30, 2015. Bombardier has committed to completing the delivery of 30 new streetcars by year end 2015, and completion of the base contract order of 204 new streetcars by 2019.
At the request of TTC staff, Bombardier has been submitting detailed documentation to support their accelerated schedule and recovery plan. The information requested includes a detailed production schedule, quality control improvement initiatives, commitments in writing from parts suppliers, and details on production equipment improvements for both of their plants in Thunder Bay and Mexico. The proposed revised schedule will be considered upon acceptance of the recovery plan and negotiation of commercial terms in accordance with the contract.
A detailed report on the history of the contract with Bombardier, present status, and moving forward plans will be the subject of a future TTC Board report. [p. 27]
This is an item where actual discussion of the report would have been useful considering that information in the CEO’s report was at least two weeks out of date by the time of the meeting. (Car 4407 is described as pending acceptance when in fact it was already in service.)
Leslie Barns is another problem-plagued contract, although the TTC expects to begin occupying the carhouse later in 2015.
The contract was initially expected to be completed in June 2014; however, construction delays have resulted in expected completion in 2015. TTC will have staged occupancy of the facility starting July 2015 and completion of the work is expected by Q4 2015. [p. 27]
When the report was written, the improper construction of the Leslie Street connection track had not yet surfaced in the media, although this was certainly known internally and to the neighbourhood. This is a general problem with the report – a lack of currency – that is compounded by the short (if any) discussion the report usually receives. The item would be an opportunity for the CEO to provide verbal updates to the printed material. There is a temptation to use the CEO’s report as “good news”, but it should also be a means of reporting on emerging problems.