On January 8, 2016, TTC management presented an overview of the operating and capital budgets at the City of Toronto Budget Committee. The presentation slide deck and video are available on the City’s website.
The format of the presentation is, in part, dictated by a standard city template used by all divisions and agencies for consistency. Much of this material has been covered from previous meetings, and so this article will only touch on some clarifications and highlights.
TTC “Conventional” Operating Budget
For the year 2015, the TTC will show a “surplus” projected at $4.1-million. This arises from a combination of lower than expected expenses which more than offset a shortfall in revenue due to ridership below budgeted levels. The surplus from operations is actually larger than shown (see p10) because a capital-from-current expense for new buses originally planned to be spread over 2015-16 was actually completely paid for in 2015. (Originally the $14m was to be paid $9m in 2015 with the balance in 2016.)
There is a $14m reduction in 2016 because there is no capital-from-current item. Because the budgets are not “zero-based”, this money becomes available for operations in 2016. (Another way of looking at this is that the subsidy and fare increases would have to be larger in 2016 if the one-time capital element had not been present in 2015.)
The presence of capital-from-current spending in the Operating Budget will complicate future tracking of TTC financial performance because any year with such spending will have to be restated to filter out this item. Similarly, projections for future fare levels must take care to distinguish how much of an increase pays for day-to-day service versus capital costs transferred to the operating budget and, hence, to farebox revenue.
Additional costs and savings for 2016 arise from many parts of the operation.
During the debate, some members of the Budget Committee (including Councillors who also sit on the TTC) appeared surprised that there was a added cost ($30.2m) to continuing the service improvements funded in 2015. This should be no surprise at all because the $95m in added spending approved for 2015 resulted in changes that could not possibly operate for the full year simply due to the lead time necessary to ramp up better service. “Surprise” that this pushes up costs in 2016 belies a lack of basic understanding of how transit budgets work.
One particularly annoying factor in the overall budget process has been the “target” set by the City Manager for a 1% reduction in costs. This can yield some creative accounting notably in the cost savings for diesel fuel.
It is no secret that the cost of oil is going down, and this produces an automatic saving. However, the TTC books this as an “efficiency” under the title of “hedging” when a good deal of the saving is simply the changing market conditions. This “efficiency” is not repeatable and could be undone in future years if prices rise. Hedging produces some savings against pay-as-you-go pricing, but this should not be confused with the rise and fall of the energy market.
Future budget projections (see below) include provisions for $16m and $14m respectively for added energy costs in 2017 and 2018 implying that this will not be a budget line available for a contribution to a savings “request” from the Mayor or City Manager.
The saving attributed to “streetcar reliability” (a program to rebuild older cars) is actually a reduction in labour costs as fewer operators would be needed to drive the larger ALRVs which are to be rebuilt in place of the smaller CLRVs.
A related issue with the target is whether it relates to total TTC spending (about $1.7b) or only the City’s subsidy ($495m). In any event, the savings booked against this target total $27.745m of which $10m is a generic cut in budgeted non-labour costs across the entire TTC. Committee members asked where, specifically, this would come from, and were told that the potential saving is based on actual spending patterns in past years.
The “savings” the TTC claims are well above the 1% level measured against either base figure, and one must ask what else might have been funded if the cuts had been limited to $17m (1% of the total budget) or $5m (1% of the subdidy).
Also evident here is the problem of budget-to-budget comparisons rather than budget-to-actual. If the actuals are running lower than budget, then the problem is either (a) the original budget was too high or (b) spending has been artificially constrained. Indeed, if there was $10m on the table for the taking in 2016, this explains where much of the “surplus” came from in 2015. The underlying question is always whether spending is artificially constrained to hit shadow budget targets, and what this might imply for overall system quality.
All of the “savings” listed here are one-time effects and they are not “sustainable” (to use a favourite term in the City’s budget parlance) for future year savings to offset tax and fare increases.
Several enhancements have been submitted to the Budget Committee. These are approved by the TTC Board, but not yet by Council for inclusion in the TTC’s base budget.
Probably the most important of these is the change in the maintenance strategy for buses so that 80% of the repairs are performed on a pro-active preventative maintenance basis rather than fixing buses after they fail in service. This causes a cost increase in the short term for transition in wor practices, but should bring longer-term savings and better service. One obvious benefit is that if buses fail in service less often (the TTC’s mean distance to failure was running at about half the industry norm), then a larger proportion of the fleet can confidently be placed in service.
In the list above “earlier Sunday transit service” refers to the surface network where many lines do not begin service until 9:00 am. The earlier subway service was achieved at little marginal cost on January 3 simply by opening stations earlier so that passengers could ride trains that were otherwise dead-heading into position for a 9 am startup across the entire network.
Additional fare inspectors for Proof-of-Payment were budgeted in 2015, but these were not approved by Council. It is now clear that the TTC does not intend to extend POP to the bus network. Presto will roll out through 2016, but bus riders will be checked as they board, not by roving inspectors. The only difference will be the medium of fare payment.
Three potential improvements were not approved by the TTC Board, but they are included in the Budget Committee preentation:
- Subway service reliability (primarily scheduling changes)
- Three minute or better service on Line 1 Yonge-University until 10:00 pm
- New streetcar service on Cherry Street
Given other budget pressures, I suspect that the first two will go back into the hopper for 2017 although they will have to compete with items such as the Spadina extension startup for funding. As for Cherry Street, the TTC will operate this service, likely starting in September, as a branch of 504 King by rearranging existing schedules at little net cost.
Future costs have been lurking just out of sight for a few years, but they are going to bite the City and TTC starting in 2017.
A large increase is projected for Presto fees ($51m), an astounding amount considering that the implementation of this system was supposed to be cost-neutral. As the footnote explains, there will be offsetting savings through the redeployment of staff and the scaling down of existing fare collection processes, but the TTC does not know yet what these will be. That is a rather odd position to be in considering how long this changeover has been in the pipeline.
There will be a cumulative added cost of $31m over the two years from the Spadina subway extension. This begins in 2017 (with no offsetting ridership and fare revenue) because of pre-service costs related to commissioning the line. Future revenues are not expected to cover total costs (although the TTC no longer puts a number in its budgets), and the actual amount of new revenue will depend on any decision about reductions in cross-border fares from York Region. If some sort of “co-fare” is created for trips straddling the York-Toronto border, how much revenue originally expected by the TTC will be sacrificed on the alter of “regional fare integration”, and who will pick up the tab?
The TTC anticipates large savings from a shift to one person crews on the subway, but it is unclear whether they will actually achieve this in the next three years (a pilot on Sheppard is planned for 2016, but there are no details yet of how or when this will occur).
All of these issues leave some major uncertainties in future budgets and will challenge politicians whose goals of minimal cost increases cannot be sustained thanks to changes already in the pipeline.
Wheel-Trans Operating Budget
As previously reported, this budget is going up well above the inflation rate (7.3%) because of strong growth in demand (14%). This arises from a combination of demographics (aging population) and provincial legislative changes increasing eligibility.
As with the “conventional” system’s budget, a substantial contribution to the “1% reduction target” comes from fuel hedging (a cost only applicable to the in-house WT van operations, not to taxis). Other savings come from savings (unspecified) on the WT taxi contracts, and from shifting riders from van to taxi travel thereby lowering per-trip average costs. These savings could be ephemeral, and future budgets will be dominated by the cost of quickly rising demand.
Capital Budget and 10-Year Plan
As previously reported, there is a $2.7-billion shortfall in funding for the capital plan for 2016-2025. The spending plans cover only the ongoing maintenance and renewal of existing infrastructure, including the subway, much of which is a half century and more old. Contrary to popular belief, subways do not last 100 years and all aspects of them require constant maintenance, moreso as they age.
I will review the Capital Plan in detail in future articles.
A major problem in the Capital Plan is that much of the funding is at the front end of the ten-year period and comes from specific projects such as the TYSSE. We have not yet had the hard, detailed discussions about “what must we really do” because there has been enough money, year-to-year, to keep capital spending at roughly the level needed to sustain the system. This will soon change.
The City of Toronto’s headroom for additional debt tops out in coming years, and unless there is a new financing strategy such as a dedicated transit tax, funding that now carries about half of TTC capital spending will disappear. This is without any new projects such as SmartTrack or the Relief Line.
Funding from Queen’s Park and Ottawa settles down to a consistent $243m annually from gas taxes. Even the anticipated federal monies are spoken for in the medium term by two projects: the Scarborough Subway and SmartTrack. They will not be available to deal with the backlog of TTC state-of-good-repair work.
It is ironic that “stimulus” is on everyone’s lips as a solution for economic woes, but this does not extend simply to fixing the infrastructure we already own.
The crisis in unfunded capital shows up in a few charts.
The unfunded slice of that pie is dangerously large, and it will grow as more “out years” without the benefit of existing funding streams become a larger part of the 10-year moving window.
The funding shortfall translates to planned capital work that will not get done, and increased problems with the quality and reliability of transit infrastructure. This also affects fleet plans as the table below show.
Finally, there is a long wish list of projects that are not even included in the plan.
Some of these, as I have commented before, need scrutiny to determine their actual priority (or even need) relative to other demands on capital such as the Relief Line. The “TBD” item regarding a rail yard is a new item in this list, and is odd considering that the budget for a new yard was supposedly part of the Scarborough Subway Extension project. I will discuss this and subway fleet planning generally in a future article.
Previous articles on TTC budgets
TTC Budgets for 2016: City Analyst Preliminary Notes
City of Toronto 2016 Budget Overview
TTC Capital Spending Priorities
TTC Budget Meeting: November 9, 2015
Steve Munro 
Interesting that a new subway yard is back on the table. Perhaps SSE is being reconsidered as an LRT line? (we can hope as much anyway).
Steve – do you know approximately how much a new subway yard costs? Would $500 million be in the ball park? Isn’t there excess storage capacity at the Wilson yard still?
My point being: would the TTC really build a $500m to $700m concrete “parking lot” for subways when they could extend Line 4 Sheppard westbound from Yonge to Downsview for a couple of hundred million more which would give those trains access to the Wilson yard and improve service at the same time? It just seems like better bang for your buck.
Steve: The Sheppard extension is not happening, and has in any event nothing to do with the need for a new yard. There is no room at Wilson for more trains. The Capital Budget makes mention of a new west end yard.
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Hi Steve,
Happy new year.
I’ve been scouring the capital budget looking for any trace of enhanced funding for transit signal priority. I remember that the 2015 capital budget (top of page 11, report to Feb 2, 2015 meeting) indicated that staff anticipated an additional 12 million would be required over the life of the capital plan. Do you see any evidence that this has made it into the budget? If so, which line item would it fall under? I thought it might be 2.4 (Signals), but it seems this is almost exclusively for subways. Either way, does it seem to you like the TTC is continuing to expand this technology to more intersections?
Steve: It’s buried in Service Planning. See page 53 of the detailed budget. It is budgeted at $2.4-million annually out to 2019.
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How much of the early subway service is simply putting trains in service as soon as they show up from the yard?
I think it is outrageous that empty trains are travelling along the line while customers are struggling with crappy night bus service.
Steve: All of the improvement consists of running in service right from the point trains leave the yard. This is a minimum cost change because the trains are there already. Only the station opening times need to be advanced. As for the night bus service, revisions to change its end time will come as part of the restructuring of surface ops to match the new subway hours, provided that Council approves the budget. As for running night services reliably, that is quite another matter. I had planned to review existing operations, but have not yet been able to get a reliable data feed for this.
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Though I think that the major TTC surface track projects in the next couple of years are mainly at various Barns and the long-planned replacement of the tracks on Bay, Wellington, Victoria and Richmond, I wonder if you can prepare your usual ‘state of the track’ report.
Steve: Now that I have the “Blue Books”, I am working on the track plan. However, there are a few inconsistencies in the TTC’s project details that need sorting out before I publish it. I can tell you that Richmond is in2016 and Wellington in 2017. Other projects have been reshuffled since my 2015 list to take into account actual conditions and to consolidate some projects so that related areas are done in one year rather than over several. I expect to publish the list in a week or so. Right now, I am working on the fleet plans.
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Has a definite routing been approved for Cherry St. service as part of 504 KING, or are they still stumbling in the dark about that?
Steve: Not definitive yet but Dufferin to Cherry would not surprise me, at least in the peak. I expect many cars will short turn at Bathurst or Spadina.
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I imagine that the replacement of track in the open-cut section at Davisville falls under “Track Programs.” Any word on when they expect to do this, how long it will take, and their service plan to account for that loss of subway service?
Steve: Things are still rather tentative the last time I talked to TTC folks about this. They are aiming at 2017, but the question is how much can be achieved with relatively short shutdowns. Another tactic will be to co-ordinate work with Metrolinx’ modifications of Eglinton Station. No detailed design or timing yet.
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Where are the new streetcars? Bombardier has missed every target and even its own unilaterally reduced targets. Bombardier made big promises about how several vehicles will be delivered per week in the new year and so far with almost half of January gone, there has NOT been even a single one delivered in the new year. It’s time to cancel the contract.
Steve: It is my understanding that there are a few waiting to enter service or at least testing. TTC insiders might like to comment on this.
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Hopefully GO’s upcoming lower height double deckers will be successful enough for TTC to take a look. That should make a good impact on the budget both in cap ex and operational.
Steve: Take a look for what?
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Double deckers for TTC, ain’t gonna happen for a couple of reasons:
1) There are too many spots were they will not get enough clearances, most bridges under the CPR North Toronto Sub, many subway stations etc. The GO buses are Geo fenced which means, if I have read the reports correctly, that they have approved routes and if the bus tries to go off them the GPS detects this and locks the buses brakes until they are released by a supervisor. There was an accident in Whitby recently that trapped a double decker for a couple of hours because it could not get clearance on the detours through the side streets.
2) Loading and unloading times would be hideously slow and most people would not go up the stairs unless they were in for the long haul. If you can get to the back of a regular low floor bus you can often get a seat.
They are a good fit for GO type service but not for most of the TTC service.
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If you mean the buses, out of the question, and more a fan’s dream. There are way too many infrastructure problems, low bridges, etc., for the TTC to successfully operate double deckers, which are best used for long-haul and/or peak service express runs. Heck, the CNGs were heavily restricted due to issues of roof overhangs at various subway station bus terminals, if not an outright ban in bus tunnels. No way a double decker could enter Lawrence or St. Clair West Stns. GO can use them because they are primarily a suburban commuter system with next to no height impedences.
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Cancelling the contract won’t get new streetcars here any sooner but would add at least another two years to the delay when we would have to use and rebuild more of the clunkers. The cost from another supplier would be at least 50% greater if they were willing to bid on a contract for non standard vehicles.
Also like Bombardier’s Aerospace arm which is getting a major bail out from Quebec, and likely the feds, the rail plant creates too many jobs in Thunder Bay for it to be closed. The Flexity 2s are good cars everywhere else they run and once Bombardier gets its quality control problems sorted out they will be good cars here. Fortunately the TTC is imposing the time penalties on them and forcing them to build proper cars.
Steve: 4415 was spotted earlier today on trial runs, FYI.
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While I fully agree that double deckers are not practical in Toronto for the TTC, it is surprising how quickly they load and unload in London. The less mobile folks (like me) stay on the lower level and the younger more agile riders zip up and down the stairs. However, a key to their success is the frequency of service. There is very little crush loading.
It is also surprising how often there are incidents in London where the roof comes off a bus due to an overhead obstruction. This is reported in The Guardian every six months or so. One recent case was on a route diversion under a low bridge, but another was on a busy regular route where a bus encountered a tree branch. The roofs are one piece and attached to the rest of the bus. When there is an overhead incident the whole roof slides off. In the last two incidents there were no major injuries, but the people on the upper lever must have been very surprised when suddenly the roof sheared away/
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One suspects that CP’s Agincourt Yard is available at the right price.
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@Robert Wightmanes.
I’ve tried to figure out the lineage of Bombardier’s many models of LRT.
I’ve read that, according to Bombardier, the Flexity 2 and Flexity Outlook are two separate models, with the Flexity 2 designed for European cities, and the Flexity Outlook designed for North American cities. That could be nonsense of course.
Unlike the old PCC streetcars, which looked the same everywhere they served, Bombardier seems to have made cosmetic changes so that no two city’s vehicles look the same, so the vehicle’s appearance is not a reliable guide to how they differ.
I gather that Bombardier supports some legacy vehicle models they acquired, when they bought out competitors, because the competitors clients are familiar with those legacy models, and don’t want to change models. I’ve read claims that some of Bombardier’s light rail vehicle’s designs are based on the designs of the vehicles manufactured by the competitors they acquired. This too could be nonsense of course.
I’d be very interested if anyone here could offer a substantiation or refutation of these claims I read — or even informed speculation.
Cheers!
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Bombardier is always known as a company that acquires its technology by buying out their competition. For example, the Learjets designs were purchased from Lear. The CRJ jets were the creation of Canadair. Similarly, the Q400 design fell into their hands when they purchased it off Boeing. Aside from the CSeries, they have very few original designs. They also have an habit of renaming their products very often. For example, the ICTS design became ART and then Innovia.
Trams are highly customized. However, most of the modern trams use the MITRAC 500 system. There are other MITRAC systems used in the older designs. But it is safe to say that the bogies and propulsion systems will be relatively the same across their modern designs. It is the soul of the tram despite whatever is placed on top of the bogies like the passenger cabins. Whether a tram is powered by PRIMOVE or a regular pantograph, that power is fed to the MITRAC system to push the tram forward.
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How much of the capital and state of good repair budget has design completed? The federal government is looking for places to spend money in a relatively short period of time…it would be good if we were shovel ready on at least 1 or 2 billion of extra projects at any one time for situations like this…
Things like second exits and station renovations should be ready to go as soon as funding is available…imagine if we had a design ready for the eastern waterfront or the DRL tunnel…or Eglington West LRT….it seems to me that the city needs to step up the design and planning to get these projects further along…once the money comes it comes fast and quickly…
I am reminded of how the feds last time around decided that we weren’t “shovel ready” on the new Bombardier vehicles….and they appear to have been more correct than we could imagine.
Steve: Projects do not generally proceed to the point of having shovel-ready designs because that itself entails substantial spending not to mention an actual commitment to a project. This triggers an “in for a penny” situation where simply having the design gives a project “priority” that many pols might not want to lend it. Imagine, for example, if detailed plans for a Richmond Hill subway were sitting around. It already has a completed EA and in that sense is far ahead of the SSE or DRL. Guess where “shovel ready” money would go.
A big problem with the TTC and City is that they tend to look to senior governments to fund big projects that, almost by definition, cannot start for at least a few years. Conversely, funders tend to be unhappy with “maintenance” because the opportunities for ribbon cutting are rare and there isn’t a single “thing” everyone can stand in front of. This might be changing, however, if the focus shifts to the “infrastructure deficit” and the backlog of SOGR work. The condition of TCHC buildings is a prime example. When the money all goes for new builds, it leaves older core parts of the system starved, but it provides lots of (expensive) photo ops.
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@arcticredriver:
As Benny says bombardier has bought up several manufacturers and inherited their models. My favourite was the Eurotram designed for Strasbourg by Socimi then eventually acquired by Bombardier. This tram has very short sections over the trucks and much longer suspended sections. They also operate in Porto and Milan. Bombardier marketed them as the Flexity Outlook E series until it stopped production in 2004.
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Robert Wightman, David Cavlovic:
I don’t know if our current perspective on GO’s double deckers (not able to operate on many routes due to clearance, need to be geo-fenced) still applies to the upcoming GO buses as they’re quite a bit lower and GO stressed that they will operate on all of GO’s bus network. We will have to see when they arrive. My concern is rather that they would be too low to be operated as a commute bus.
Michael Greason:
I agree with you on headway impact. I think if they are deployed strategically (say on Finch originating routes) where lots of passengers get on/off at one spot they could yield minimal impact (esp. if articulated are used already) with increased comfort (way more seats than articulated).
But yeah, still a dream!
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The new double deckers are 13’6″ tall according to Transit Toronto, which would still give them problems with some underpasses. I don’t know if they are geo fenced as much as the original DDs.
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Occasionally I see a double decker charter bus downtown, but they all have tinted windows, so I can’t see the layout. 13’6″? Hmmm. Taking into account ground clearance, and the height of the floors and ceiling, would that allow for enough room for six foot ceilings? I had wondered whether the aisleways were staggered, on each floor, to provide standing room there, but restricting the height of the seats above the full-height section on the other floor.
Has anyone seen a mockup, plan, or been inside a modern double-decker here in Toronto?
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Just as a clarification to the bad reading of the numbers by Transit Toronto:
Original DD – ADL Enviro 500 – 46 upper seats, 32 lower seats, 4.30m (14.0 ft).
New DD – Enviro 500 LHD – 51 upper seats, 30 lower seats, 4.15m (13.6 ft or 13’7.4″).
There is a MTO List of Bridge Clearances, but I’m not aware of a City of Toronto equivalent.
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One more bit, this year GO will be getting new “Super-Lo” models with 3.9m height (an order of 250 with an option for 150 more). That’s 12’9.5″.
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I took the GO bus from Union to Brampton last night and saw a couple of bridge clearance signs that said 4.2 m. I don’t know if I would want to take a 4.15 m tall, or even a 3.9 m high bus under a bridge with 4.2 m of clearance.
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@Robert Wightman,
The numbers are always rounded down to the point if it’s exactly 4.2m they will put 4.1m on the sign. Still it makes you want to duck when going under it.
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I knew that but still a long vehicle on a road with a vertical concave curve will be higher in the middle than its published height. The morons who designed Brampton’s new city hall annex have an extension out over the sidewalk to protect pedestrians from rain. While the sidewalk is curved to allow trucks to take the corner without mounting the curb the overhang is not and it has been hit numerous times.
I remember one of my engineering profs telling me that doctors buried their mistakes but ours tend to block traffic or do something else that is highly visible.
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@Richard,
Thanks for the clarification. This sounds like a compound issue to be resolved, but not really the fact that it’s unionized. The rookie sounds like an asshat (emoji <3), who doesn’t know the difference between Standard Operating Procedures and the real world. The TTC has a lot of experience in its staff, but too rarely is it tapped to make the system work better.
The system needs a feedback loop, so that CIS gathers more information before sounding off, and drivers can explain what could be better. Too much happens in a black box, so that one side or the other takes the blame, when the focus should be on fixing the system.
@Robert,
That’s true, but you need a relatively large grade change. Specifically the “extra” height is (Gradiant1 – Gradiant2) *Length/800, thus the table below. I guess that’s why GO has resorted to geo-fencing in the past. Normal roads should be beyond the 6-12% range.
Doctors only kill one person at a time, Engineers usually do it in bulk.
Steve: By the way, as an engineer friend of mine would point out, any design that had a roof overhang conflicting with the traffic passing underneath it is the fault of the architect. The engineers just built to spec.
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I was on the 510 the two months ago between Union and Queens Quay Station. When we got to Queens Quay, there were two cars sitting in the station and the curve to the south west. The operator got on the phone to find out what was happening and told us they had a dead CLRV that they were trying to couple a LFLRV to. He said that the rookie operators and supervisors didn’t have a clue how to do it so he went coupled them up so they could all get moving. They pushed the CLRV to the Ex. He said that there was a trick to coupling them on a curve and if you didn’t know what to do you would just derail the front car.
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Haven’t we discussed here that the CLR vehicles were originally equipped with standard rail-type couplers, like the PCC vehicles that preceded them.
Steve: Only 175 of the PCCs (4400-4499, 4625-4699) had couplers, and these were not “railway type” devices, but couplers specifically for MU operation including intercar wiring. Towing or pushing cars was still done using the standard drawbar that all PCCs carried to ensure that the coupling did not pull apart.
A couple of years ago, on the 504, we had to dismount, and wait for a shuttle bus, because a disable vehicle was blocking the route. I stopped to take some photos. A special tow bar, about two metres long, was used to connect the two vehicles.
I think the two metre two rod would make the derailing you describe more likely, as it would put the bogeys farther apart than if a standard coupler were used, and that would mean the two bar was placing more force at an angle to the direction of the track.
I took pictures. Like all my pics, so far, they are in the public domain: 1 2 3 4
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In July 2012 City Council stated (by a large majority) that the East Bayfront LRT was a top priority.
I note that in the TTC budget for the next year (and decade) this project is not in the budget, even as a ‘below the line’ item but appears on a ‘wish list” on page 21 as “Projects for future consideration”. I realise that there is a “reset” of Waterfront transit underway and this project clearly needs Federal or Provincial funding but surely if Council says something is a priority it should, at least, go onto the “Below the Line” listing?
Steve: As you have probably noticed in the budget debates, there is a difference between saying something is a priority, directing that it occur, and finding the money. New large projects like the TYSSE and the SSE have their own budget lines and revenues, but the LRT does not. One major difference is that it’s officially a Waterfront Toronto project, not a TTC project, but nobody has given WFT any money to undertake the rebuilding of the eastern waterfront of which the LRT is only a portion.
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