Tory Threatens Fiscal Chaos At TTC, Misrepresents Auditor General’s Findings

Toronto’s Mayor Tory finds himself painted into a corner, a task he achieved all on his own with a mindless, solitary focus on controlling taxes and reducing waste in government spending. One might almost think Rob Ford was still in the Mayor’s office, especially considering that Tory’s understanding of the City’s financial situation is on a par with his predecessor’s. By “understanding” I do not mean simply reading and digesting reports from the City Manager, but of moving beyond knee-jerk reactions and policies where facts are not allowed to intrude on political fiction.

The fiction that we don’t need more taxes, that there are “efficiencies” to be found throughout the City, has strangled services through the Ford years, and shows no sign of releasing its grip under Tory. Unquestionably, from a starting point back in the “old days”, one might find money to be saved in any organization. However, there is a limit to how many rabbits there are in the budget hat, and as years go on, those rabbits get rather scrawny. In his recent presentations to Council, City Manager Peter Wallace warned that the hat is empty, and that the hocus-pocus by which past budgets have allowed low tax increases cannot continue. New revenues must come from somewhere because cuts simply won’t provide the level of savings required.

Shawn Jeffords in the Toronto Sun quotes Tory:

Tory said he would accept the TTC’s submissions as an “interim report” and assume that further efforts will be undertaken to meet the council directive. He also pointed to a report from the city’s Auditor General earlier this year which said the TTC had only implemented 14 of 53 cost-saving recommendations from her previous reports as evidence that further belt-tightening could be done.

This fundamentally misrepresents that Auditor General’s findings in a May 11, 2016 report:

Of the total 53 recommendations assessed in the current follow-up process, 14 recommendations, or 26 per cent, have been determined as fully implemented. For the remaining 39 recommendations, TTC staff have made significant progress towards implementing the recommended changes. [p 1]

In other words, the TTC is working on all of the recommendations and the AG is not breathing fire with any implication of foot-dragging or obstruction. That’s the implication Tory  brings to the discussion with the attitude that if the TTC won’t fix itself, he will find someone to do it for them.  As Ben Spurr reported in The Star:

“If (the TTC) can’t do this themselves, and I’m confident they have enough good management there to find these ways of doing things better and differently, then I guess we could help them,” the mayor said.

The AG’s recommendations flow from four reports going back to December 2012.


What, exactly, does “not fully implemented” mean? Have they started? Are they almost finished? Is there a dispute about the validity of the AG’s proposals? How much will each of the changes actually save and, thereby, contribute to “fixing” the TTC’s financial crisis?

The background reports reveal that the “Total” counts shown above are only the items that were not “fully implemented” in previous reports. For example, the December 2012 Wheel-Trans audit had 22 recommendations of which 9 had already been implemented by April 2014 as reported by the AG. The numbers here imply a much lower rate of addressing issues because previously completed items have been dropped from the count.

When one takes the time to read the details, one will find that many of the 39 items listed above are on the verge of being completed, or are dependent on changes (such as updated computer systems) that will address clusters of recommendations in one fell swoop later in 2016. Few of the items will lag into 2017 and beyond, and at least some of these are dependent on other systems or events for their timing.

What is consistent throughout the reports is that outright rejection of the recommendations is rare, and work on many is well underway. Moreover, the dollar savings by each of the changes is rarely stated by the AG and so there is no way to gauge their relative importance and budgetary effect.

Mayor Tory is renowned for being at work at 6:00 am at City Hall digesting his reports. From the way he has presented the Auditor General’s information, it is clear that he does not know that the vast majority of the recommendations have, in fact, been acted on by TTC management. Moreover, he would also know that few of the recommendations have a concrete dollar saving attached, and for those that do, it is not on the scale needed to rescue him from the TTC funding crisis.

The TTC faces a shortfall of $184 million for its base system, and a further $31m for Wheel-Trans. The total budget for 2016 is $1.860.4 million of which $1,736.7m is for the base system, and $123.7m is for Wheel-Trans. Year-end actual expenses will be slightly lower due to some cost reductions in 2016, but the subsidy requirement will be higher due to ridership and fare revenue at a lower-than-predicted level.

This shortfall is very much the product of the political optics of the 2016 budget in which a rosy ridership and revenue projection removed the need for hard discussions about subsidies and allowed a continued focus on service improvements. That particular trick failed when the riders did not show up as expected, and 2016’s budgetary scam is only compounded in 2017. However, this time around, the numbers are too big to fudge.

The Sun quotes Mayor Tory:

“I just think that any big organization, where you’ve got billions of dollars and tens of thousands of employees, there are going to be those opportunities without diminishing service that just see you doing differently, running things better,” Tory said.

Tory, who never gives up the opportunity to spend money the City does not have in aid of yet another feel-good photo op, might be forgiven for confusing the “billions” in the TTC’s capital budget (the one that builds new subways and performs major repairs) with the operating budget that actually provides service (including basics like air conditioner maintenance). Most of the operating costs arise from putting service on the street and maintaining vehicles and infrastructure.

The TTC faced ongoing budget crises twenty years ago thanks to the early 1990s recession. By 1995, the proposed budget cuts were severe, but at least the effects were discussed in the open. The 1995 Operating Budget report and a companion response to a proposed 5% cut in agency spending laid out the situation. In 2016, we have yet to see a public debate on the TTC’s 2017 plans, and the issue has been conspicuously absent from TTC Board agendas. The TTC Budget Committee has not met this year, and currently plans call for a September 6 meeting with the results going to the full Board on September 28. This is hardly an organization chomping at the bit. Is the Board trying to avoid a confrontation with Mayor Tory? Why do we even have a TTC Board if the Mayor’s office will make all decisions of any consequence?

In the 1990s, the TTC took the politically necessary “we can make do” position on funding cuts, but this had major effects on service and maintenance. Then, on August 11, 1995, the Russell Hill crash permanently changed the TTC’s view of itself. Three people died thanks to a combination of poor training and inadequate maintenance.

To his credit, CEO Andy Byford has taken a firm position, or so it would appear, on the level of cuts the TTC can actually endure, but whether his position will win the day either at the TTC Board or at Council is quite another matter. Will Josh Colle, TTC Chair, finally stand up to the Mayor or risk losing any remaining credibility of his office?

The remainder of this article reviews the four Auditor General reports in detail.

2012 Wheel-Trans Audit

This audit reported 22 recommendations of which 9 were fully implemented as per the AG’s report in April 2014. Status updates were provided in May 2015. A further 2 have been implemented by May 2016.

Recommendation 7: Maintain an up-to-date registrant database. This change resulted in registrants moving from “active” to “inactive” status if they had not used WT for 12 months. No dollar savings were identified, and the issue was more that a no-longer eligible client might re-appear and receive WT trips.

Recommendation 9: Improve the flexibility of the policy re late cancellations and no shows for trips including provision for unusual circumstances. As of the May 2016 report, this had changed to “fully implemented” status.

Recommendation 12: Reduce overtime. A cost saving of $707k was achieved in 2013 through a combination of reduced absenteeism and staffing at a level adequate to cover service. This “saving” is the reduction in “overtime” with no recognition of the offsetting staffing costs incurred to make this possible. It is an example of the problem of a narrow focus on “overtime” as a problem without looking at the larger picture for total staff costs.

Recommendation 13: Reduce preventable WT bus collisions. This was regarded as a training issue, although the benefits were not expected to appear until 2014 or later. No dollar value was assigned to this.

Recommendation 14: Improve trip routing. This was addressed by updating the trip dispatching software including changes to the “maps” and timings it uses to plan the route of a WT vehicle. No dollar value was assigned to this.

Recommendations 16-20: These relate to the sedan taxi contracts, an issue on ongoing problems for the TTC. The AG was satisfied that the updated taxi contracts would save the TTC $2.35m annually. Whether this is still the case given the dispute over the terms of that contract and its effect on payments to drivers is another question.

Recommendation 21: Update the WT Standard Operating Procedures (SOPs) especially those relating to administration of taxi contracts. As of April 2014, 78% of this work was complete. As of the May 2016 report, this had changed to “fully implemented” status.

The following recommendations were outstanding as of May 2016.

Recommendation 1: Explore free-ride programs to encourage WT users to shift to the “conventional” system. The intent is to avoid the much higher cost of a WT trip, although why WT users would regard free TTC rides as much of an incentive to shift is an open question. No doubt, we would then find the TTC arguing that they no longer actually needed WT, and therefore did not deserve free trips. This is a Catch-22 situation.

By 2015, the TTC reported that this has been addressed through the wider question of making the system accessible and providing for trip planning that spans both WT and the conventional system. This is related also to eligibility changes reducing door-to-door requirements for some WT users. Changes to trip planning were expected to go in effect from January 2017 through mid-2018. Changes to door-to-door services were planned in late 2016.

Recommendation 2: Develop a plan to integrate WT users into the conventional system. This is closely linked to accessibility issues on the system as a whole including subway stations, the old streetcar fleet, and the degree to which WT users can actually navigate to transit stops and between routes. In 2015, the TTC reported that this will be addressed as part of the previous recommendation.

Recommendation 3: Expedite the development of an eligibility classification system for WT as set out in AODA. The irony of this recommendation, intended to trim the user list, is that the standards now enlarge the base of eligible WT users. This is a major budget problem for the TTC. In 2015, the TTC reported that the rollout with re-registration of the existing client base is planned for June 2016 to December 2018. This was updated in 2016 to January 2017 to December 2019.

Recommendation 4: Enhance the WT eligibility assessment process. This was not well received by the Advisory Committee on Accessible Transit (ACAT), notably the proposed requirement for a medical certificate. In 2015, the TTC reported that this was in progress together with Recommendation 3. Management will report to the Board on the Eligibility Changes Project in 3Q2016.

Recommendation 5: Establish a photo ID card for WT users. In 2015, the TTC reported that improved identification would be incorporated with the Presto fare card rollout. If this is not possible, WT will pursue its own photo ID card (as per 2016 report).

Recommendation 6: Establish a policy regarding repetitive late cancellations and “no shows” for eligibility assessments or appeals. In 2015, the TTC reported that this would be implemented by June 2015. It is not clear why this item remains on the outstanding list.

Recommendation 8: Improve the responsiveness of the WT call centre. Many changes were planned by the TTC including improved staffing, but the issue was still open as of April 2014. In 2015, the TTC reported that many changes had been made at the Call Centre including additional staffing, but the call volumes continue to rise faster than capacity to handle them. Some trip booking has been shifted to web access. Changes to staffing and practices continued according to the 2016 report, but the major change depends on the implementation of new scheduling software in 2017.

Recommendation 10: Develop procedures to identify WT users who consistently miss trips. In 2015, the TTC reported that technical problems had limited the ability to implement automated calls to these users. A solution was expected to be implemented by 3Q15, but this item is still on the outstanding list. TTC management reported that these users were 6% of the customer base in 2014 and 2.3% in 2015. It is unclear why this remains on the outstanding list.

Recommendation 11: Consider adopting a more restrictive policy re late trips and cancellations. In 2015, the TTC reported that this is part of the planned new scheduling system to go into operation in January 2017. In 2016, the TTC noted that better scheduling and tracking of vehicles could allow a less restrictive policy.

Recommendation 15: Assess the need for WT Community Bus routes. In 2015, TTC Management’s position is that the Community Buses provide a worthwhile service by eliminating the need for single-rider trips. In 2016, TTC continues to evaluate whether any of these routes can be replaced by regular transit services operating in the same areas.

Recommendation 22: Reduce the number of printed newsletters and consider advertising to offset the cost. The amount of printed material has been reduced and some info shifted to the web. The idea of advertising was rejected by TTC management as likely to be uneconomic given the low circulation. As of 2015, TTC was reviewing the need for continuing this publication.

The outstanding recommendations include many items aimed at trimming the WT user base and hence service costs. While some of this may be possible, it has been more than offset by the growth in WT eligibility both through demographic shifts and legislative changes.

January 2014 Bus Maintenance Phase One Audit

This report contained 18 recommendations of which two were fully implemented by 2015, and one was considered no  longer applicable. This reduced the outstanding count to the 15 shown in the table above. Of these, two more have been fully implemented by 2016 leaving 13 outstanding. Many of these are actually related items that are to be addressed as a package.

Recommendation 1: Evaluate the merits of the 5,000 km preventative maintenance program. The TTC reviewed industry practices, and determined that a less-frequent PM cycle of 10,000 km was appropriate only for buses in their first three years. Thereafter, the shorter cycle is required.  The projected annual maintenance saving is about $120,000 starting in 2016.

With more detailed tracking information, the TTC might extend the 10k cycle to buses in their first five years.

It is worth noting that the fleet average mean distance to failure lies between 5 and 10k kilometres. It would not make sense to schedule PMs less often than the average failure rate because this would increase the likelihood of buses failing on the road rather than having problems caught during inspection. A proposal by the TTC to shift to a pro-active policy of replacing/overhauling components before their expected failure was denied by Council in the 2016 round.

Recommendation 2: Ensure compliance of bus maintenance with Provincial legislation.

Recommendation 6: Ensure adequate annual bus brake inspections and relines.

Recommendation 7: Improve bus repair quality. The TTC has implemented a quality assurance group to track maintenance, and the mean distance between on road failures has been rising indicating some success on this front. The AG considers this recommendation to be fully implemented.

However, there are related concerns that have not been addressed in these reports. First is the effect of fleet demographics on reliability. To some extent, changes in the mean mileage to failure could be the effect of fleet aging (older buses fail more often), or of the replacement of an older fleet with a batch of new buses. To be meaningful, the numbers have to be reported on a more fine-grained level. For example, the TTC knows that its hybrid fleet is troublesome, and even within that fleet, some buses are worse than others. As the worst of these are candidates for early retirement, reliability numbers will improve with no underlying change in TTC maintenance practices. There is also the distinction between an “on road” failure and one that occurs before a bus even leaves the garage. They are counted separately, but only the former show up in the stats the AG cites.

The following recommendation was dropped:

Recommendation 5: Assigning Service Persons as the primary staff members to perform the 10,000 kilometre Lubrication Inspections. TTC management noted that the “Service Persons” are not qualified to perform this work, and that doing so incorrectly would affect the reliability of engines, transmissions and differentials with a resulting high cost. One might wonder what provoked the AG to make such a recommendation in the first place.

The following recommendations are still not fully implemented as of the May 2016 report:

Recommendation 3: Ensure that bus mileage records are accurate for proper scheduling of preventative maintenance. To be completed as part of the new automated vehicle location system rollout in 2017-18.

Recommendation 4: Consolidate safety checks and inspections to reduce the number of times a bus is out of service. TTC reports that the target for completion is june 2016.

Recommendation 8: Establish standard repair times for common bus repairs, a monitoring system to review work and incorporate this in performance evaluations. TTC reports that this is in  progress with data collection underway at two garages. Target completion date for implementation is December 2018.

Recommendation 9: Establish training programs for technicians. TTC reports that training is underway as of mid-2016.

Recommendation 10: Establish failure rates for major internal bus parts rebuilds. This affects both warranty claims and internal quality control. TTC reports that this is in progress with a completion date in 2017.

Recommendation 11: Conduct a complete analysis of bus rebuilds conducted at Duncan Shops. TTC management report that a “no contracting out” clause prevents them from sending this work outside of the TTC, but they are reviewing whether some component work could be shifted in anticipation of future contract negotiations. The target date for implementation is 2018.

Recommendation 12: Improve the process for retrieval of defective parts. TTC reports that this is well underway with completion at all sites by mid 2016. Design of a process to improve claims for these parts is to be finished by the end of 2016.

Other recommendations for which work is incorporated with this item are:

  • 13: Maximize use of bus warranty provisions.
  • 14: Minimize the “no fault found” problem with warranty claims.
  • 15: Ensure proper accounting for bus warranty claims and payments.
  • 16: Provide a management information system for warranty claims and recoveries.

Recommendations 17 & 18: Review the effect of shortening bus lifespan to 15 years from 18, and a plan to minimize future costs of hybrid buses. TTC approved a revised fleet plan for the hybrid buses in February 2016. Early retirement of all of this fleet is impractical because of the large bulge it would create in capital requirements and the fact that part of the fleet is reliable enough to stay in operation. Early retirement of some buses will contribute parts to a spare pool that will reduce ongoing costs. The report on bus lifespan is not expected to be ready in time for the 2017 capital budget round (already in progress), but its findings will be incorporated in future years.

December 2014 Bus Maintenance Phase Two Audit

This is a more recent report for which the 2016 review is the first in the annual cycle. There were 21 recommendations in 2014 of which 9 have been fully implemented:

Recommendation 1: Non-revenue fleet management. The TTC consolidated functions that were distributed through various departments in one position in 2015 to co-ordinate vehicle requirements.

Recommendation 5: Assess needs for non-revenue vehicles and equipment prior to finalizing procurement decisions. In effect, ask “do you still need this” before authorizing a replacement.

Recommendation 6: Replace aging and high-usage vehicles to reduce repair costs. The TTC has replaced the target vehicles, but has retained most of them as spares to avoid rental costs when the newer vehicles are in for repair. This is another example of the tug-of-war between capital and operating budgets. Capital constraints lead to vehicle retention beyond a reasonable age, but this drives up operating costs.

Recommendations 9 & 10: Rationalize rental vehicle needs. TTC has reviewed its needs across the agency and replaced some rentals with purchased vehicles. Annual savings are $500,000.

Recommendation 11: Review rental vehicle insurance costs and compare them to self-insurance (as the TTC does for all but major liabilities on its revenue fleet).

Recommendation 12: Work with the City of Toronto to determine whether a joint RFQ could be issued for non-revenue vehicles.

Recommendation 19: Reduce the time to bring a new non-revenue vehicle into service. The TTC has reduced the time required to fit out a new vehicle for service by 50%. The AG’s concern appeared to be that the longer time left old vehicles in service (and running up maintenance expenses) longer than necessary. What is not clear is whether the original elapsed time of 28 days was a function of such work being done at low priority among other work at the affected garages.

Recommendation 21: Ensure that non-revenue vehicle procurement takes into account the ease and practicality of warranty administration.

Outstanding recommendations:

Many of the outstanding recommendations are linked, and their number is more a testimonial to granularity than it is to the pervasiveness of problems. The same “fix” addresses many of the items, and all of these are scheduled for completion by 4Q16 when updates to the TTC’s inventory control system will be completed.

Recommendation 2: Consider implementing a chargeback system to departments for their use of non-revenue vehicles.

Recommendation 3: Enhance the procurement process for non-revenue vehicles to evaluate their need and purpose.

Recommendation 4: Review the utilization of non-revenue vehicles. TTC reports that a trial installation of GPS trackers took place in 2015. Full rollout scheduled for 4Q16.

Recommendation 7: Review life cycle costs of vehicles to optimize maintenance and replacement. The TTC’s replacement criteria were aligned with the City’s in early 2015. Vehicle cost monitoring is being done to provide information for fleet management.

Recommendation 8: Ensure that fleet inventory and vehicle work orders are accurate, complete and up-to-date. TTC reports that this has been incorporated in the Fleet Manager position (recommendation 1).

Recommendation 13: Ensure that the non-revenue fleet receives scheduled maintenance. This was implemented in part with the GPS tracking pilot in 2015 that allowed vehicle mileage to be centrally monitored.

Recommendation 14: Ensure that up to date vehicle mileage is available for scheduling of preventative maintenance. This was addressed through the GPS project.

Recommendation 15: Improve the effectiveness of the Vehicle Work Order System for the non-revenue fleet.

Recommendation 16: Implement a non-revenue fleet quality assurance program.

Recommendation 17: Ensure adequate controls to prevent the ordering of non-revenue vehicle parts for non-TTC uses. Some controls are already in place.

Recommendation 18: Shorten garage turnaround times and address capacity issues for non-revenue vehicle repairs.

Recommendation 20: Establish a warranty management process for non-revenue vehicles.

Non-Revenue Vehicle Fuel Card Controls

One of four recommendations is considered completed by the AG.

Recommendation 2: Develop procedures to hold management accountable for non-compliance with policies, undertake a review of PINs and cancel those associated with terminated employees and decommissioned vehicles, and develop procedures for timely notification that an employee with a PIN has been terminated.

Outstanding recommendations as of May 2016:

Recommendation 1: Review and revise the current fuel card policy and procedures such that adequate controls are developed and implemented to facilitate effective monitoring of fuel card transactions and detection of questionable transactions. TTC reports that the second round of procedure revisions is in  progress.

Recommendation 3: Strengthen fuel card controls by ensuring that cards and PINs are issued in accordance with policy, improve the effectiveness of sample transaction reviews, and define exception reporting requirements. Several procedural changes were implemented, and this work was completed in June 2016.

Recommendation 4: Work with the City’s Fleet Services Division to examine using the City’s fueling stations and fuel card. TTC conducted a pilot and is now rolling this out for its non-revenue fleet with an expected completion of 4Q16. This will “significantly reduce” but not eliminate the TTC’s need for its own fueling system and cards.

24 thoughts on “Tory Threatens Fiscal Chaos At TTC, Misrepresents Auditor General’s Findings

  1. Steve I appreciate your analysis and thoughts in what is again a stellar article.

    If Tory wants to ensure cost reductions at the TTC I say let him. Let’s start by curtailing all his highly publicized service improvements and delay the Spadina subway opening. That should save us money which is after all, what he wants right?

    Better yet, why not just cut back on SOGR work? I mean.. who needs functional signals or quality track on the streets. Hell.. while we are at it.. why not just stop all SOGR work on the subway? If we stopped all the work it would mean no more weekend closures and we could easily make the TTC the better way and increase revenue that way.

    Lastly, why not raise the fare by a dollar a ride and passes by 20? I mean.. in Toryland it would increase revenue and not decrease ridership right?

    Now that I typed all that out I can safely say that it is as crazy as it sounds. Cutting back and eliminating SOGR work lead to Russell Hill and raising fares is decreasing ridership.

    As David Gunn once said you need to focus on a state of good repair before expanding. I am at a loss when it comes to understanding why John John can pull a 1 billion dollar park out of his ass along with service improvements but yet the TTC needs to cut their budget. If anything should be cut at the TTC it is everything John Tory went on the media to publicize including the 514. I would love to see him explain that to the people of Toronto.

    Steve: It’s worth noting that the 514 Cherry only exists because the TTC stole service off of 504 King to offset the cost. But Tory was happy to be there for the official first trip.


  2. We’ve had 4 years of Ford style of cuts. We don’t want Ford more years of cuts. Enough is enough, already. Has John Tory been possessed by the spirit of Rob Ford? John Tory needs to be exorcised (he doesn’t need to be exercised, obviously) of that unwanted spirit.

    Steve: Tory is still behaving as if he expects Doug to run against him in 2018.

    Liked by 1 person

  3. Steve said:

    “It’s worth noting that the 514 Cherry only exists because the TTC stole service off of 501 King to offset the cost. But Tory was happy to be there for the official first trip.

    Actually the 504 but the point is well made (naturally!) The Cherry Loop is much more like a new short-turn point (for the 504) that replaces the (long-closed) Parliament loop and the often talked about but never built new loop at Broadview and Queen. It DOES make sense to add service to the central part of the 504 route and running between the (new) Cherry loop and the (recently rebuilt) Dufferin loop even if it means a bit less service at either end of the 504 route (Broadview to Cherry and Dundas West to Dufferin.) If the TTC actually paid attention to such things, they would be carefully evaluating this new 504-514 route to see if they got the balance right and, ideally, adding more (or larger) cars as required.

    Steve: Ooops! Fixed!

    Then there is the small matter of managing the service so that the 514s come out onto King and split gaps rather than running nose to tail behind a 504. But that’s not TTC style.


  4. The Star reported that the

    “$184 million shortfall … includes increased costs associated with switching to the Presto fare card system, the opening of the Spadina subway extension in late 2017, vehicle maintenance, and decreased revenue as a result of lower than expected ridership this year”.

    The Star article left a few questions in my mind:

    Is the mayor asking the TTC to find “efficiencies” to cover the “increased costs” in addition to a 2.6% claw-back of the city subsidy to the TTC?

    Steve: Yes.

    Why would “vehicle maintenance” be a significant increased cost?

    Steve: I suspect it is just one item in a long list. You might remember those AC units on the BD line.

    Did the city expect to run the new TYSSE free of any additional subsidy? Is the city/TTC still obliged to pay the full operating deficit for subway service in York Region? (If so, how did York Region get such a good deal?)

    Steve: Buried in the TTC’s capital budget is a very old estimate that opening the Spadina line would add $14m per year to operating costs (net). This has never been discussed in any regular reports, and the TTC has been very bad at publishing future year cost projections despite repeated requests to do so by the City.

    In 2015, this text read:

    Operating costs of the entire subway extension to Vaughan Metropolitan Centre are estimated to be $33.7 million on an annual basis in current dollars (estimated net Operating cost of $14.2 million). A Memorandum of Understanding has been approved by the Region of York and the City of Toronto regarding operating and maintenance cost responsibilities.

    [TTC Capital Budget “Blue Books” for 2015, page 1036.

    Note that the $14 million figure had appeared unchanged for several years in the capital budget, and a big correction to “current” figures was inevitable. It came in 2016 when the text read:

    Net operating costs of the Spadina Subway Extension are estimated to be approximately $30 million per year …

    The MOU referred to in 2015 was struck many years ago. The idea was that the TTC would get all of the fare revenue and carry almost all of the cost. York Region would be responsible only for surface facilities at stations in their territory. However, the original assumption was that all of the stations would be in the TTC fare zone and trips on the subway would collect a TTC fare (much as the TTC subway extensions into zone 2 when it existed were part of TTC zone 1). Students at York were not happy with facing an extra fare for a trip they now take entirely on YRT vehicles to the university, and so a deal has been reached to forego the TTC fare on the north end of the line for YRT customers, in effect a “co-fare” arrangement. The degree to which this has increased the projected net operating cost is unknown.

    York Region got a good deal because the whole project was forced on the TTC by Queen’s Park. Mind you, “forced” might be an exaggeration. The TTC Board were extremely compliant because lots of capital subsidy was available, and nobody talked about operating costs at the time. Does this sound familiar?


  5. I would argue that there are still efficiency to be found in service, however, when you look at how overloaded the TTC is, that would be a question of better management of headway making better use of vehicles so they can offer more reliable service, not further reducing resources. The note that you make above with regards to the 514s splitting headway, being to the point.

    Also the need to invest to get more bang for the buck is fairly clear, the TTC needs to get out of traffic, on more routes, so they can be more reliable, and more easily held to account. Systems that can show where the driver is in terms of headway to the vehicle ahead and behind, so he can adjust reasonably, and so that less management is required, but more accountability possible. Ford, reduced service, and avoided investment, today we need to improve efficiency, and to a great degree that means making investments, not avoiding them.


  6. How much money could the TTC save by shutting down the Sheppard subway and just running the buses they won’t be using for service improvements?

    (Yes, okay, I’m being snarky. But I think the TTC really needs to just come out and say “None of the service improvements are happening and this is what else we’re taking away.”)


  7. There is a systemic problem when politicians and “the public” try to manage a large service. Steve Munro has the time and energy to research the details. Most of the public do not go into details, and fall for the lines that “there must be savings, if only they cared”.

    A service as large as TTC has many complexities. There has been pressure to optimize costs for many years. When a “boss” says “find me a 2.6% budget cut or else”, this is only possible if the service had a big contingency that they knew they did not need. Presumptions that this “must be the case” are easily thrown around by politicians running for election, but may not be realistic.

    I have seen some comments like “shut the Sheppard Subway line and use buses instead”, or that “buses are cheaper than streetcars”. It might be helpful to look at the true incremental costs per rider of the various modes. One of the biggest costs is staffing, and a bus can carry maybe 50 riders, a new streetcar maybe 150, and a subway train maybe 1,000 riders. The number of non-accountants who would follow that math are fairly few. (I am an accountant – you might have guessed).

    Steve: And each vehicle type brings not only its operator, but its infrastructure which becomes an increasing part of the cost base as one moves up the capacity scale. A goodly part of the Sheppard line’s cost is fixed regardless of how many people ride it, and so in a sense the marginal cost of another rider is zero. The fully allocated cost, on the other hand, is immense.

    The TTC has been through the exercise of “finding efficiencies” many times in past years. There is always something to find the first few times around, but that well has run dry.


  8. The fun thing is this only addresses problems the auditor tackled. Not discussed is tons of other service and back office issues. Anyone know how old the TTC’s payroll/HR systems are? There’s a plan to upgrade them. Cross your fingers they don’t go “Phoenix” like the federal disaster.

    Steve: I am quite sure the Auditor’s office will keep its eye on this project given how many horror stories there have been about SAP implementations in other companies. On the bright side, the City is already running this product and so they have experience with it.

    As for other issues, the TTC was part of the Core Service Review under Mayor Ford, and little was found by the external consultant/auditor to suggest large-scale savings were possible.

    As you know, I have a big problem with the way that the TTC manages (and reports on) service, but fixing this will at best improve service only to the advertised quality (the level used for estimating if more is required). It will not result in net savings.


  9. DavidC wrote:

    “The Cherry Loop is much more like a new short-turn point (for the 504) that replaces the (long-closed) Parliament loop and the often talked about but never built new loop at Broadview and Queen.”

    This jogged an old memory for me. In fact, I believe it was on this site where I first read that the TTC sold the Parliament Loop land as part of a complicated land swap where they in turn acquired land at Queen and Broadview. I believe it has now been 10 years since that happened. What has the TTC done with that new property? Have they realised any gain from it? Any income? Is it simply a disjointed strip of land, with zero practical value to anyone other than the TTC?

    Steve: The property is occupied by a parking lot operated by the Parking Authority, although title to the land now rests with the TTC. The plans for Broadview Loop have disappeared in the mists of time.


  10. Malcolm N said:

    “I would argue that there are still efficiency to be found in service, however, when you look at how overloaded the TTC is, that would be a question of better management of headway making better use of vehicles so they can offer more reliable service, not further reducing resources. The note that you make above with regards to the 514s splitting headway, being to the point.”

    But can this reduce expenses or increase income? I bet the majority of 514 riders are Metropass holders. When a line is crush loaded every trip, even perfect management won’t ultimately increase revenue, or decrease expenses.


  11. Federal Civil Servants are currently enjoying the benefits of “efficiencies” in the administration of their pay and benefits. Unfortunately many, who have been underpaid – or not paid at all – for several months will have to wait to as long until October (optimistically) until those “efficiencies” can be transformed into a fair payroll system that gives them what they are entitled to have. Getting paid every payday is not exactly a special privilege. It is what we all take for granted. Except of course those federal civil servants who are “benefitting” from the current round of “efficiencies”.

    I am sure there are “efficiencies” that a task force could find in the TTC. Perhaps health and benefit, or payroll administration or hiring could be “efficiently” combined with other city departments. This will be sure to work – just as the new federal payroll programme has been a big success. The trouble that Mayor Tory has failed to identify, is that these costs – and their commensurate “efficiency” savings, are peanuts in relation to the overall cost of running the TTC. If I remember correctly, 75% of the cost of running a transit system is the salary for vehicle operators.

    Steve jumps in: The cost is for labour generally including maintenance and administrative staff. Operators account for roughly half of the TTC’s workforce.

    Now how are we going to make that expenditure more “efficient”. Operators are dedicated one to a vehicle. There is no getting around that. The only “efficiency” that can affect vehicle operator salary and benefit cost is a service cut. In a system that is currently “inefficient” because of the chaos caused by overcrowding, it is hard to see how making that inefficiency worse could actually result in an “efficiency”.

    The fact is that the TTC has been underfunded for a long time. There is a lot of tax headroom in Toronto. (I for one would gladly pay more, but it only works if we all have to.) Our property tax income has been damaged by 0% increases and below inflation increases by 2 (or is 3) buffoons who we had as Mayor during our 4 mayor experience as a megacity. Given 2-3% inflation that means that we are 10-15% short in income from property tax vs. prior to the megacity. If it takes a tax increase to properly fund the TTC we should do so. I for one, am eager to pay.


  12. John Tory wants efficiency? Shut down the Line 4 Sheppard subway, and cancel the Line 2 Bloor-Danforth subway extension to the Scarborough Town Centre. No? We showed you what is inefficient, why don’t you listen to us, John?


  13. You are misrepresenting what Tory said. Tory asked for simply a review of the budget and offered help to do so should the TTC brass need it. Asking for reducing wasteful spending and finding efficiencies is NOT normally called “threatening fiscal chaos” unless you are Steve Munro.

    Steve: Read the article. Tory’s budget request requires a huge cut in the TTC’s total budget, especially if he goes into another one of his “I will save you from a fare increase” routines. TTC needs well over $200m more in 2017 from a combination of subsidy and fare revenue, and that’s not small change you find in the couch. Tory cites the review of the police budget, but neglects to mention that savings there come in part from shifting items off of the police to other parts of the city. Only the gross saving to TPS is mentioned, not the net saving after extra city costs are factored in.

    Moreover, Tory was quite aggressive in saying that if TTC wouldn’t find cuts, Tory would find cuts for them. No review to see if they are even possible, just cut. That’s the mark of an ignorant bully who cannot accept that his tax policies are a mess, not of an enlightened, helpful mayor.

    TTC has so much waste. For example on a Sunday afternoon at Finch station, you often have a staff attending the automatic gates when the whole purpose of the automatic gates is that no staff is needed and all this when there are two station collectors on duty during what is not even a busy time. Every time there was a streetcar diversion or subway station closure, there used to be gazillions of customer service people simply standing there. Once at St Clair station, there were no fewer than fifteen customer service agents in addition to supervisors, two station collectors, etc and most of them were just standing around. TTC can right away get rid of unnecessary customer service agents standing at random intersections, stations, etc doing nothing. TTC should also get rid of staff attending automatic entrances.

    Steve: For what it’s worth, those CS agents are paid a lot less than the regular TTC staff. I do agree that there are times they are excessive in number, but there have been many complaints in the past about how TTC did too little to inform and assist riders when there were changes. That’s where the demand for them came from — it was a political decision to improve “customer service”. For some of the big diversions such as subway shutdowns, they need all the staff they have.

    Another thing TTC can do is to enforce the law on it’s property. We have countless people smoking on TTC property including TTC bus drivers and why does the TTC not fine them? We have a lot of TTC staff who open manual gates to go through and then fail to close them. There are also a lot of problems with buses speeding and running stop signs and running red lights and why does the TTC not fine them? At Kipling station, there has been so much problem with buses speeding that the TTC put in radar which displays bus speed on a giant screen. TTC can do a lot to reduce wasteful spending and increase revenue. Also a lot of train cleaners at terminal stations are simply sitting on trains until the door closing sound begins and that is another place where the TTC can save money by getting rid of unnecessary staff.

    I would also like to take this opportunity to thank John Tory for doing a wonderful job and is by far the best mayor the city has seen.

    Steve: John Tory is a disaster, and certainly does not deserve the title of “Transit Mayor” some have given him, but we will have to disagree on this.


  14. One of the things I’ve learned Steve is that the TTC board is full of toothless appointees whose job it is to ask for staff to report back and rubber stamp things.

    I hope for once they refuse to cut service and force John Tory to make cuts for them. If John has to be on record making cuts watch how quickly they don’t happen.

    It is moments like this where I wonder if the TTC would be better under control of Metrolinx. Yes service would be crap if it was but could it be any worse than how the TTC is managing things?


  15. You and I have discussed John Tory before, but I never expected that you would refer to him as an ignorant bully or a disaster. I understand your irritation to a point, but don’t recall you ever referring to his predecessor in those extreme terms [admittedly, I haven’t read every last word that you’ve put out since 2010]. Has your latest escalation taken place because Tory seemed to hold out early promise, now dashed, or did you accept an ignorant bully as a fait accompli, in 2010?

    Steve: I chose that phrase deliberately as a reference to the late Mayor Ford. Tory may have better manners, but when he is cornered, he gets nasty.

    I’m not sure that all your younger readers realize the miracles that you and your friends have pulled off over the last 50 years. You deserve a great deal of credit for it all, and it does, in my eyes, give you the right to have a strong proprietary interest in any GTA transit matters today. It won’t, however, solve the many problems related to transit if the people with knowledge can’t find a way to approach the people with power.

    Steve: There are times when it is necessary to call out someone who likes to be acclaimed as a “Transit Mayor” and thinks of himself as “progressive”, but whose dogged adherence to unworkable financial models (not to mention unworkable transit plans like SmartTrack) shows an inability to accept that he (or his advisors) needs a new world view.

    The remarks about the AG’s report have the earmarks of someone who didn’t even read the document (you don’t have to plough through all of the details to see that the AG has no problem with the TTC’s response). Suggesting that “if they won’t do it, I will find someone who can” is a direct threat to TTC management, and we’re right back to where we were with Ford and Gary Webster.


  16. Jonathan said:

    “But can this reduce expenses or increase income? I bet the majority of 514 riders are Metropass holders. When a line is crush loaded every trip, even perfect management won’t ultimately increase revenue, or decrease expenses.”

    No, however, it might make a few more trips possible, and there are routes, where buses are half loaded, and crush loaded on the same route minutes apart, whereas if the spacing had been properly maintained they would both only be fully loaded.

    I do believe a small amount of revenue could be had on some routes, as there is space. Also riding transit is a habit, and poor management, means fewer people using the service even off peak. It also means poorer use of resources, where you will see 3 streetcars or buses nearly on top of each other, and a wide gap. This often means a crush loaded car, a loaded car, and a 1/2 loaded car in the procession. If that 1/2 car was back a bit, it would be fully loaded from the people who had arrived at the stop afterwards. This may be less of an issue on some routes (504) because there never seems to be enough capacity, however, even here, there is the question should there be a richer mix of ALRVs here? Should a larger portion of the new cars be here? Should the TTC be focusing its largest cars entirely on its most overloaded routes?

    However Jonathan, my basic point was and is, that this improved management, does not mean cuts are possible. I would in fact argue to get the real efficiency that may be possible, investments need to be made. This would be evidenced in terms of new cars (if Bombardier could deliver). It would be seen on some bus routes, if there was the possibility of dedicating lanes more of the time, so that buses could run more efficiently, in many cases that would mean actually putting in curbs, and creating something closer to a real BRT. However, the bottom line, the transit has been in terms of basic investment neglected for so long, that well, improved revenue may be possible, as a yield from investment mostly. That is a plan, and money, followed by improvement later. It also requires more active and effective support from the balance of the city departments (see St Clair). If you could improve running speed on say Finch East with a BRT, would that not reduce the number of buses required and draw out new riders? Controlling gap, so that buses were evenly spaced could be helped with technology, and interactive system of signal controls, would that not improve both running speeds, and spacing, hence capacity at the margin? Again, real plan, a hard look at the most overloaded routes, and an honest to god plan to address it.


  17. Thinking a bit outside of the TTC box, we still need a car services review to really clarify just how well the private vehicles are subsidized and otherwise avoid paying their ways/weighs. One older figure from Vancouver puts the annual avoided cost at $2700 each car each year, or in Caronto, about $2.700,000,000, using a figure of about a million cars from when we had a Vehicle Registration Tax that brought in c. $60,000,000. Other estimates have gone up to a higher figure, and some of it would be debatable, ie. what level of government picks up that cost, and who pays for climate catastrophes etc. is a good Canadian info source.

    A clear subsidy is that of asphalt drainage, and about 70% of the Don River surge is from storm drains, but we may be on the hook for flood ‘protection’ and raising trackbeds etc. without thinking of drainage taxes and connection fees, which would be more complex to be doing than simply restoring the Vehicle Registration Tax.

    Surely that could be done in this year, for what? $80,000,000?

    The majority of TTC Commissioners are far too limited and carservative to actually stand up for transit against the votorists, or so it seems. While at times, I’m sure that the unions of the TTC are part of our problem, the larger issues of how the private cars are enabled in many many ways, often obscure, should be first and foremost, but we’re dominated by those of the suburban car-oriented areas, as Mamblowlitti pointed out recently at the Clowncil during the Scarborough subway extension time.

    And yes, let’s put the Sheppard line forward to sacrifice for “economy”. I’ve heard a per rider cost of $10-ish each; that adds up.

    Liked by 1 person

  18. Steve:

    I chose that phrase deliberately as a reference to the late Mayor Ford. Tory may have better manners, but when he is cornered, he gets nasty.

    Quite so. Anyone who claims otherwise is not only ignoring the nasty tone of his current ignorant crusade, but forgetting how Tory tried to tar as racist anyone who dared to question the Scarborough Subway Extension.

    Tory at his best behaves far better than any of the Fords ever could, but too often he is far from his best. He owes us all an apology for that.


  19. I lived outside of Toronto (and Canada) for about 6.5 years, early 2009 to mid/late 2015.

    What I noticed upon coming back the most was that

    1) TTC service is noticeably and significantly worse than it was. At least it feels like that to me. I take the same routes I did before. Kipling to St. George was a reliable 20-25 minute ride at all times during the day. Now, especially during rush hour, forget it – pulled alarms, technical problems, and whatever else. Crowding is also generally worse than I remember it.

    2) Traffic in the GT(H)A is much worse; it’s terrible – at what seems to be like ALL times of the day. The 401 seems to be clogged all the time. Sheesh.

    Toronto, and the GT(H)A in general, clearly have a transportation infrastructure problem. A big one. How anyone in their rights minds comes up with TTC cutbacks as something sane in such a situation is really beyond me. OK, the TTC may be wasteful here and there, and there could be savings. But those savings need to be re-spent inside the TTC itself, and the TTC needs to get MORE money. The TTC and public transit budget should be increasing steadily year-to-year, not decreasing. Decreasing is madness.

    Since Canada has not been run over by a marauding Mongol horde led by Kublai Khan, mutant wild sharkboars with laser beams in their eyes, or suffered through a 1930s style Depression, the obvious conclusion is that masses of people are moving to the GTA because of available jobs and the area’s increased prosperity, not because they are refugees fleeing disaster, which is somewhat backed up by the fact that glitzy condo towers are sprouting up throughout the city, not tent cities manned by the ICRC. Which means there is money in this city, more money than there was in say, 1995 or 2000 or 2005. Housing prices gave gone through the roof, which must mean more ability to raise revenue (via property taxes, but also others, I presume).

    Good transit costs a lot of money. Money that does not necessarily come from raising the price of a metropass to $200, but through taxes.

    I remember once seeing studies that tried to estimate how much traffic jams cost a city’s economy. How much wasted productivity that is. Has anyone done a well-publicized study about how much money we are losing in Toronto by NOT investing more heavily in transit? Where’s the numbers about how much service cuts to the TTC COST US ALL in lost time and productivity?

    Does anyone think that a worker who has a worry-free, easy and comfortable ride to work is not more productive than one crumpled up in a cramped train/bus that is running significantly behind schedule?

    Steve: The Mayor and his friends talk often about investing in Toronto, but when it comes to actually paying the bills, all they care about is keeping taxes down.


  20. I am so sick of this crap gridlock costs the economy so much in lost productivity and we don’t have a conversation about tolls or gridlock taxes but it always come back to cutting service or fare hikes for ttc enough is enough also the board should be made up of people that understand transit not Tory puppets which the majority of it is also change the age of free rides to 6 and start fare evasion crackdowns way too much money is being lost due to fare evasion


  21. How about reducing staff levels, especially at the supervisory tiers … I believe the TTC has a very high supervisor to staff ratio.

    Perhaps it’s time that some of these positions are eliminated.

    I see the biggest cost is in staff salaries.

    Steve: Actually the TTC has been working on this already. However, if anything there is a problem that service “management” can be MIA at times. It varies from route to route, time to time.


  22. Can we have David Miller back?

    If not, I suggest the place to cut is the Mayor’s office. Do you really need a mayor? You have a city manager and a city council under a “strong council” system. What’s the point of the mayor?

    Liked by 1 person

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