TTC Abdicates Responsibility for Public Budget Review

Toronto City Council is poised to set dates for the 2017 budget process with a report up for approval at its July 12, 2016 meeting. This report states:

By early August, 2016 all City Programs and Agencies will have submitted their Tax Supported Capital Budget and Plan and their Operating Budget requests to the Financial Planning Division for review and recommendation to the City Manager and Deputy City Manager & Chief Financial Officer.

Over the course of the rest of the summer and fall, each budget request will be analyzed and reviewed, with a first round of analysis and review undertaken by the Executive Director, Financial Planning from July to early September. A second round of review will occur with the City Manager and Chief Financial Officer to review unresolved issues and recommendations with the Deputy City Managers and respective Program and Agency Heads. The Preliminary 2017 Operating Budget and 2-year Plan and a 10 – year Capital Budget and Plan will be finalized by the end of October to provide sufficient time to prepare the necessary budget documents, communications and budget website in time for the Budget Launch. [p 17]

The Executive Committee, in transmitting this report to Council, has recommended:

3. City Council adopt an across the board budget reduction target of -2.6 percent net below the 2016 Approved Net Operating Budgets for all City Programs, Agencies, Toronto Community Housing Corporation, and Accountability Offices [Agenda Item 2016.EX16.37]

The report also lists budgetary pressures going into 2017, and for the TTC these include:

Base requirements for system operation:   $136 million
Presto card implementation:                 29
Annualization of 2016 changes:              13
Revenue loss due to declining ridership:    12
Total:                                    $190 million

Anticipated revenue from a fare increase: $ 12 million
  • The base requirements include inflationary increases plus startup costs for the Vaughan subway extension (TYSSE). Although its planned opening date is at the end of 2017, operating costs will begin to accumulate earlier in the year with no offsetting revenue. Ongoing operating losses are expected to exceed $10m annually, but this will be an issue for 2018’s budget.
  • Presto card implementation was supposed to be cost neutral, but at least during the cutover period, TTC will bear costs of the new and old fare collection systems. Looking further ahead it is unclear whether there will be new long term costs associated with redeployment of the Station Collector staff to station management duties.
  • The annualization value is derived by subtracting the first two items from the consolidated value of all TTC pressures which is given as $178m.
  • The revenue loss is versus the budgeted level of revenue for 2016.

The 2016 budgeted subsidy level is $493.6m for the regular system plus $116.7m for Wheel-Trans for a total of $610.3m. A 2.6% cut translates to $15.9m, and so the TTC is facing a drop of over $200m relative to its already-identified needs. This is not the scale of cut that is absorbed by minor “efficiencies”.

The TTC Board has a Budget Subcommittee where one might expect a discussion and response to financial pressures might be discussed, but all meetings planned for 2016 to date were cancelled. The committee is scheduled to meet on September 6. A meeting of the full board to discuss overall policy and direction was planned for April 7, but this was also cancelled.

There are no public meetings planned before the “early August” deadline for a preliminary budget submission to the City Manager, and we have no way of knowing what options might be under consideration by TTC management or the Board. Moreover, any advocacy that might take place during this process will be completely hidden, and there will be no information about options for 2017. This could very well suit Mayor Tory and his TTC Chair Josh Colle, but it begs the question of just what the TTC Board is for if not to discuss options and examine the potential effects of funding changes.

In late June, Chair Colle’s office wrote to a regular reader of this site saying:

The TTC Budget Committee is comprised solely of a handful of members from its Board – currently, Chair Colle and four other Board members sit on the committee.

There was a Budget Committee meeting scheduled for this June, but it was cancelled because the TTC Board members felt that the current budget issues are so pressing that they should come before the entire Board, not just the handful of Board members sitting on the Budget Committee.

The budget items will be making their way before the TTC Board as a whole, so that all of the Board members can weigh in on the agency’s financial situation. That being said, the TTC Budget committee will still be holding meetings in the fall, in advance of the 2017 Budget. [June 27, 2016]

These issues may be “pressing” but clearly not enough to warrant the Board’s attention at this time. The next meeting of the full Board is scheduled for September 28, 2016, well after the lion’s share of work on budget review will have been done. Indeed, the City’s Budget Committee will already have begun its informal review of the 2017 plans before the TTC Board’s next opportunity to debate and set policy for the new year.

The July 11 TTC Board meeting agenda is long, and important items will not receive the debate they require. The 2017 budget issues are mentioned only in passing as part of a review of ridership problems, not as a broader review of funding, fares and service options.

What is the purpose of this Board?

A long-standing problem at the TTC has been the absence of advocacy, of the presentation of options. Toronto may not be able to afford every item on the transit wish list, but at a minimum, we should understand what options are even on the list, and what they might cost.

There was an “Options” report in August 2014, during the interregnum between TTC Chairs Karen Stintz and Josh Colle. The publication of this report greatly annoyed then-candidate Tory’s campaign because it appeared to support positions taken by Olivia Chow. After election, Mayor Tory discovered that transit really did need improvement, and seized on this as a way to establish a toe-hold on more progressive policies.

With cancellations and a long gap before their next meeting, the TTC Board is not participating in a very necessary public discussion of transit’s future at a critical time. The Mayor’s Budget and Executive Committees may slash any TTC proposals to ribbons, but this should occur in public, not by way of a secret initial budget submission from TTC management.

Meanwhile, Council is about to debate billions in capital spending for several rapid transit projects. These cannot possibly be afforded without new revenue, new taxes by whatever name they might be called. Council as a whole steadfastly refuses to accept the link between a “no new taxes” policy and the inability to provide service, let alone build new lines and maintain the infrastructure we already have.

Mayor Tory and Chair Colle were happy to announce new money for transit over the past two years: new services, restoration of the Ford/Stintz cuts, and free transit for children to name a few. The proposed budget policy for 2017 undoes all of that investment and more. Where will the photo op be held to announce the cutbacks?

Air Conditioning as an Optional Extra

Every spring for some years, the TTC has been caught flat footed with air conditioning units in trains and buses that do not work when the hot weather arrives. This year is easily the worst in my memory. Instead of the occasional “hot car”, they are so prevalent that the official advice is to avoid the middle pair in a train on the BD line (Line 2) because that’s where they stick the ones with no AC.

This started out as a “we’ll fix them as soon as we find them” earlier in the season to an admission today that the fleet won’t be back in working order until the end of the summer. Here is the TTC’s Brad Ross on Twitter:

20160707_BradRossACTweet

The problem even has its own web page where the TTC states that 20-25% of cars on BD do not have working AC.

The situation is made even more ridiculous by the huge difference between the size of the subway fleet and the number of trains the TTC actually needs to operate service.

The Bloor-Danforth and Sheppard lines both use T-1 trains, although Sheppard is being converted to 4-car Toronto Rocket (TR) sets and one is already in operation there.

  • Peak trains on BD = 42, or a requirement for 252 cars (summer schedule).
  • Peak trains on Sheppard = 3, or a requirement for 12 cars.
  • Spares at 20% of 264 = 54 cars.
  • Total requirement = 318 cars.
  • Total fleet = 370 cars.

Meanwhile, on the YUS line, the TTC has more trains than it needs because most equipment intended for the Spadina extension and for more frequent service with automatic train control has already been delivered.

  • Peak trains on YUS = 51 (summer and winter schedules are the same)
  • Spares at 20% of 51 = 10
  • Total requirement = 61 trains
  • Total fleet = 71 (June 19, 2016 Scheduled Service Summary, last page)

This means that the TTC has roughly 50 surplus T1s that are available as an overhaul pool, plus 10 TR trainsets that could be redeployed to the BD line where their working AC units would be most welcome. (And, yes, before someone kvetches, I know that the BD operators would have to be trained to drive the TRs, but many probably know already, and not every crew needs this.)

What we are seeing is a TTC that has been caught out acknowledging the severity of its problem, claiming, basically, that it is impossible to overhaul AC units in advance because they only fail when it gets hot.

20160707_BradRossACTweet_2

The TTC makes a big point of publicizing its Customer Satisfaction stats and trumpeting how strong they are (although we only have numbers to 2016Q1). Hand-wringing over lost ridership is their new passtime, and yet some issues, including failing AC units, are not even mentioned in the staff report on this subject.

It is simply not credible that the TTC is unable, with some juggling of its fleet, to field enough trains where all six cars have AC on the BD line while they get the rest back in proper shape.

All that is needed is the will to organize service around rider comfort.

The Dwindling Capacity of the Yonge Subway

Yesterday’s launch by York Region of their Yonge Subway Now website brought to the fore the question of just how much room remains on the Yonge Subway for additional riders. Over many years, claims about capabilities of new subway technologies together with changing projections for future demand have left Toronto in a position where its subway is badly overloaded with little relief in sight.

This article traces the evolution of those claims and the reality of what can actually be provided to show that building a Relief Line is not a project for a future decade but one that must begin now.

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York Region Wants a Subway, Overstates Available Capacity (Updated)

Updated July 6, 2016 at 5:10 pm: “Yonge Subway Now” has updated their website to remove the double counting of capacity improvements, and to clarify that their claims about subway capacity apply to the peak point south of Bloor Station. The revised text is included in the main article.

Although in theory there will remain 4% of free capacity on Yonge south of Bloor in 2031, this is hardly the sort of margin we should be planning for. The Relief Line’s demand projections show that it has a major effect if it runs north to Sheppard, and it will have to be in place sooner rather than later to avoid deadlock on the Yonge line.

A related problem is the question of station capacity to handle passengers with trains arriving about 30% more frequently than they do today.

York Region has wanted a subway to Richmond Hill for years, and there is even a completed Environmental Assessment and its Addendum for this project.

Today, July 5, 2016, a new website extolling the virtues of this project went live. It contains the usual things one would expect about the growing need for transportation and how a subway will improve the region’s future. Unfortunately, it also contains a misrepresentation of available and future subway capacity.

But what about overcrowding you say?

  • Metrolinx’s Yonge Relief Network Study analyzed options for crowding relief to the existing Yonge Subway line by examining new local and regional travel opportunities and improving mobility across the GTHA. Key findings include:
    • Significant relief to the Yonge Subway line will be achieved through already committed transit improvements, including:
      • TTC’s automatic train controls [adds 29% capacity];
      • New subway signals [adds 10% capacity];
      • New six-car subway trains [adds 10% capacity];
      • Toronto-York Spadina Subway Extension [adds 5% capacity]; and
      • Regional Express Rail/SmartTrack/DRL will add even more capacity.
    • With the above capacity improvements in place the Yonge Subway line will be running under capacity when it opens and beyond 2031.
    • The Yonge North Subway Extension only adds 9% demand at peak period.

Updated July 7: The text above was the original version. The page now reads:

But what about overcrowding you say?

  • Metrolinx’s Yonge Relief Network Study analyzed options for crowding relief to the existing Yonge Subway line by examining new local and regional travel opportunities and improving mobility across the GTHA. Key findings include:
    • Significant relief to the Yonge Subway line will be achieved through already committed transit improvements, including:
      • TTC’s automatic train controls [adds 29% capacity];
      • Toronto-York Spadina Subway Extension [diverts 1,300 riders to free up 5% capacity]; and
      • Regional Express Rail diverts 4,200 riders to free up 15% capacity.
    • With the above transit improvements in place the Yonge Subway line will be running under capacity when the extension opens in 2031.
    • The Yonge North Subway Extension has a projected ridership of 14,000 to 22,000, but is only expected to add 2,400 demand during the AM peak hour, at the peak point south of Bloor.

Let’s start off with the increased capacity for the Yonge Subway. The Metrolinx report cited here says (p 15) that the existing capacity is 28,000 passengers per hour per direction, and that by 2021 this will rise to 36,000.  That’s roughly a 29% increase, and is possible because of the new signal system which includes automatic train control. This will allow trains to run closer together, roughly every 110 seconds in place of the current 140 seconds.

Capacity of the new subway cars is already included in the 28k value as these trains have been exclusively providing service on the Yonge line for a few years. They no longer represent a marginal improvement that is still available. The design load for service planning (average loads over an hour, not peak loads on a train or car) for the new trains is 1,100 passengers. If trains run every 140 seconds, that is equivalent to 25.7 per hour or a capacity of about 28k/hour. Moving to a 110 second headway gives 32.7 trains/hour or a capacity of 36k/hour.

Traffic diverted to the TYSSE (Toronto York Spadina Subway Extension) at 5% of current capacity represents 1,400 per hour. This is in line with the value shown in the Metrolinx study (see chart below).

GO/RER has only a modest effect on the Yonge corridor because the Richmond Hill line is not part of the RER network, and other routes paralleling Yonge (the Barrie and Stouffville corridors) are too far away to have a meaningful impact. There is also the issue of the fare differential between GO/RER and the TTC which could discourage some riders from travelling on GO.

SmartTrack was originally claimed to be capable of subway-like service down to a 5 minute headway (12 trains/hour) that would serve Unionville and Milliken stations. However, we now know that “SmartTrack” will really be just a few more GO trains (part of the already planned RER improvement) stopping at a few more stations within Toronto, not the “subway like” operation some in York Region might have expected.

The Metrolinx study includes a chart showing the interaction of demand and capacity changes to 2031.

YongeNorthDemandProjection

The current 2015 demand is shown as higher than the actual capacity (31.2k vs 28.0k) based on the level of overcrowding now experienced on the line. The light blue dotted line shows the capacity before the new signal system is activated, and the solid blue line shows the added capacity. Even this will not be sufficient to handle the projected growth to 2031 absent other changes.

The TYSSE and other changes  are expected to shift 1,300 per hour from the Yonge line, and a further 4,200 would be attracted by GO/RER. This mostly, but not completely, offsets the anticipated growth so that by 2031 the “base case” demand is 32.3k, slightly higher than the demand today, but in less crowded conditions thanks to more trains/hour.

The Yonge North extension adds only 2,400 peak hour passengers and brings the line up to 96% capacity. Note that this is the peak hour average, and there will be some overcrowding due to variations over the hour.

This leaves no room for growth, but it also shows the paltry additional demand expected on a very expensive subway extension. Indeed, this makes the Scarborough extension to STC positively shine by comparison with 7,300 peak hour riders. The projected demand on the Richmond Hill line appears to be lower than the existing ridership of the SRT!

But things are really not that bad.

Those 2,400 are net new riders attracted by the subway in place of existing bus service. Total ridership will be a combination of then-current bus passengers feeding into Finch Station plus the 2,400 new riders.

Metrolinx shows that the “long” version of the Relief Line to Sheppard produces a sizeable reduction in projected demand on both the Yonge line and for the Bloor-Yonge transfer movements.

YongeReliefDemandEffects

If Metrolinx, Toronto and York Region are really serious about providing capacity for future extension and ridership growth on the Yonge Subway, then construction of a Relief Line is absolutely essential despite its cost.

Meanwhile, York Region should update its website to provide accurate claims about future changes to subway capacity. Blatant inaccuracy such as we see here are the marks of hucksterism designed to sell a project, not a professional representation of what is actually needed.

Update: The new version of the website addresses these issues, but I must wonder why the incorrect information appeared there in the first place.

Reviving the Scarborough LRT Proposal (Updated)

Updated July 5, 2016 at 8:00 am: Revised drawings for Kennedy Station have been added showing better detail of the the LRT lines and a temporary bus terminal. Minor textual changes have been made in the article including an observation that the scope of replacement costs for removing the existing SRT structures will vary depending on the timing of shutdown and the degree to which existing structures are adapted/recycled.

Updated at 8:45 am: The potential sources of cost overstatement for the updated LRT option have been summarized.

With the recently announced increase in the projected cost of the Scarborough Subway Extension, the question of reverting to the original LRT plan for Scarborough has surfaced again. It is no secret that I favour this plan, but the political environment has been so poisoned that discussion of the options is, mildly speaking, difficult. When the Mayor feels that he must imply racism in critics who are simply trying to advocate for their view of a better transit system, Toronto politics are at a new low. However, the implications of the LRT plan must be addressed on their merits, not on simplistic political comments unworthy of the Mayor’s office.

On June 29, the TTC issued a briefing note regarding the cost of the LRT option in the context of current events. The question here is whether the claims and assumptions behind this note are legitimate and represent what could be achieved with a “best effort”, as opposed to presenting a less attractive picture to give the impression that the LRT represents an unacceptable downside.

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Property Taxes and Subway Financing

The financing of a new rapid transit project in Toronto is a complex business, and probably the most complex part of the whole thing is the effect this has on property taxes.

This article is intended as an introduction to how these taxes actually work. It is not an exhaustive review, and there are subtleties beyond my scope here.

This is an article for people who like the gory details, and so I will insert the break right here.

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Smart Track Fantasy: Tax Increment Financing

Back when SmartTrack was first announced as the centrepiece of John Tory’s mayoral campaign, the most obvious question was “how will you pay for this”. At the time, “this” consisted of very frequent service running over existing GO transit trackage plus a heavy rail extension to the Airport Corporate Centre, and it had a nominal price tag of $8 billion. On the presumption that each level of government, so overwhelmed by the obvious necessity of SmartTrack, would pony up 1/3 of the cost, the campaign then turned to the issue of how the City of Toronto’s share, $2.6b, might be financed.

Enter the tax wizards of Tax Increment Financing (TIF), a financial scheme not unrelated to pulling rabbits out of hats or making the attractive assistant float in mid-air with no visible means of support.

The premise of TIF is simple: If there is a piece of land that, but for public investment, would sit empty for all eternity, then any taxes that might arise from induced development there are “found money”. In other words, if we take a swamp, drain it, clean up the pollution, build roads and utilities and install a transit corridor, all with public money, then the development that follows can be used to finance the investment through its future property taxes.

It’s rather like investing in a pair of glass slippers and then charging Cinderella for wearing them. She’s going to marry into money, and her family can afford to pay you back.

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