Updated March 19, 2019 at 4:00 pm: The TTC has replied to questions I sent about the new Presto spending. There is a major change in project scope.
Buried in hundreds of pages of the TTC’s Capital Budget are a few sheets on the implementation of Presto, the fare system foisted on Toronto by Queen’s Park.
According to the project description, the estimated final cost (EFC) for the TTC would be $44 million (this is net of subsidies from other levels of government). However, as the project budget shows, $43 million was spent to the end of 2017, and a further $19.4 million in 2018. Most of the costs booked to date have been under the category of “Project Management”.
The project is supposed to wind up in 2019, but there is a budgeted TTC cost of $17.3 million.
And lo and behold! In 2020 there is a further $49 million.
Both the 2019 and 2020 spending are net new in the budget this year, although $47 million of the 2020 amount is still considered to be “unfunded”.
On March 5, 2019, I asked the TTC what this proposed spending was to cover considering that the Project Summary (below) is silent on this new money.
And so a question for everyone who is following the Presto story: Why is there a total of $66.3 million in new money included in the 2019-2028 Capital Budget that was not there last year? What will it pay for? Will this spending ever end, or are will Toronto continue to discover costs for Presto it missed when the project to adopt this system was sold to the TTC Board and Council?
The TTC Replies:
A portion of 2019 added funding is to enable TTC farecard staff to continue work on PRESTO implementation (products, service standards, etc.) There is also a portion of unspent 2018 funds carried forward into 2019.
Some 2019 costs and the 2020 cash flow is a preliminary estimate for the cost of an on vehicle ticket solution for buses that will allow customers to pay with cash to obtain a ticket that will allow them to pass through faregates. This is a very early estimate that was developed as part of the comprehensive list of projects identified in the Capital Investment Plan. As noted, aside from initial funds for a feasibility study this project is not funded.
The 2019 funding increase was two part:
a) Continued PRESTO implementation costs
The PRESTO rollout was anticipated to be substantial complete in 2018 with the rollout of the PRESTO Ticket product, and solutions for cross boundary travel, downtown express travel and other PRESTO payment products. MX was unable to deliver these items, particularly PRESTO Tickets, as expected in 2018 and delayed the implementation to 2019. Resources were also added to the capital program to addresses software quality and system performance issues. Additional capital funds were requested to accommodate and support the continued work and change to the PRESTO implementation plan.
b) Commence initial Cash on Surface (Farebox Replacement) work
A solution is required to allow cash paying customers transferring from surface vehicles (buses, streetcars, Wheel Trans) to enter non-integrated TTC stations with fare gates. Initial capital funds were added to year 2019 and 2020 as a very early estimate that was developed as part of the comprehensive list of projects identified in the Capital Investment Plan. This funding is for business case development and feasibility analysis only.
We had also added funds for the development of a fare payment solution for Wheel Trans contracted taxis in the event Metrolinx/PRESTO was unable to do so.
[Email from Stuart Green, March 19, 2019]
In the Project Expenditure Summary (third page below), the section “Budget Comparisons” includes three lines:
- “B”: Approved budget figures from the 2018 Capital plan
- “P”: Proposed budget in the 2019 Capital plan
- “C”: Change from 2018 approval
The planned spending in 2018 was $10.6 million, but this is revised to $19.5m showing the change in the year just completed. New spending of $17.3m and $49.0m are proposed for 2019 and 2020. There is an offsetting entry elsewhere in the budget reducing the 2020 approval to only $2m.
This is a very large change in the scope of the project and shows the degree to which features that should have been included in the base Presto functionality are missing either because the TTC didn’t ask for them, or because Metrolinx intends to charge for their implementation. This will be of interest to the Auditor General’s review of the Presto contract now underway.