The agenda for the Toronto Transit Commission board meeting on November 29, 2021, is rather thin considering that the board has not met for some time, and there are major policy issues worth discussing about the system’s future.
Two major reports are:
TTC ridership continues to run below budget projections, although it has been growing. Recently it has been tracking near budgetary projections, but shortfalls during stay-at-home periods earlier in 2021 have kept the year-to-date total below expectations. Although we are now almost at the end of November, only data to the end of September are reported here.
Another view of ridership is based on “boardings” where each transfer (except between subway lines) counts as a new boarding. In transit parlance, these are “unlinked trips” as opposed to the “linked trips” that have traditionally been associated with individual fares paid. Even that gets tricky with passes including the two-hour transfer.
Relative to pre-pandemic demand, the bus network is at 55%, streetcars are at 42% and the subway is at 38%. Updated data showing recent experience would obviously be useful here to see whether riding has plateaued, or if it continues to grow, especially in light of recent service cuts.
Demand on Wheel-Trans is down substantially compared both to pre-pandemic times and to budget projections.
Bus occupancy has grown steadily over the year. An important point about the chart below is that it is measured trip-by-trip rather than being averaged over all trips on the system. What we do not know, however, is how many of these trips have high loads because the affected bus is running in a gap, and how many are because the service overall has less capacity than required for demand. Also, of course, we do not see the distribution of crowded trips by route or time-of-day.
An important issue here is that as overall demand recovers, the TTC plans to set its crowding targets progressively higher until they reach historical pre-pandemic levels. If service, and hence crowding, are irregular, then some buses will operate well beyond comfortable or attractive levels even as (and if) riders get more used to being in crowds.
Overcrowding was a constant complaint in pre-pandemic times, and Toronto should not aim simply to return to an overstuffed system. However, more service costs money and that is in short supply, even for politicians who are truly pro-transit at budget time.
The TTC reports financial results and the status of major projects quarterly (usually), and the Q3 numbers are in the November meeting agenda. (The report includes many other components, but I will leave these until my general review of the board meeting after it occurs.)
What is very striking about the numbers here is the relatively strong position the TTC is in compared to its original budget.
Here is the status as of the end of the quarter.
The “Net City Funding” shown above is not all money from City taxes, but also includes contributions from the provincial and federal governments.
The evolution of projected expenses is described in the report:
As of October 2, 2021, TTC Conventional Service expenses are $84.5 million below budget and are expected to be $81.9 million under-budget at year-end. Approximately half of this underspending is attributable to TTC Conventional service operating below budget, resulting in wage and energy under-expenditures. The remainder of the under-expenditures primarily relate to:
• One-time savings associated with deferred hiring and spending where possible, reflective of management’s response to reduced passenger revenues;
• Efficiencies realized in 2021, which will be incorporated into the 2022 Operating Budget submission;
• Overtime management; and,
• Lower than anticipated COVID-19 incremental expenses.
The year-end under-expenditure projection reflects an expectation that expenditures will increase in Q4 as hiring and training activities have resumed and in key priority areas are being accelerated to support a full return to pre-pandemic service levels in 2022.Source: Financial Update for the Period Ended October 2, 2021, p. 9
Of the $82 million in lowered expenses, about half is due to Labour and Benefits cost reductions.
Overall revenue is down by $63.3 million but this is offset by a comparable reduction in expenses.
Two entries in that table show how the planned spending has changed from the original budget.
On the revenue side, a planned $15.8 million draw from reserves (a pool of funds built up from better-than-expected results in past years) has been dropped. In other words, about one quarter of the drop in “revenue” compared to budget is a foregone reserve draw, not a decline in revenue from passengers or ancillary income.
On the expense side, the TTC has been so successful at cost containment that it can make a $36.1 million contribution to the reserve.
These two changes, a combined swing of almost $52 million, do not include any potential saving from the layoff of workers under the vaccine mandate program. Those savings, if any, will be reported in year-end results. I asked the TTC to clarify this, and they replied:
No “savings” assumptions post-Nov. 21 is included.
We needed to hold budget room to be ready for people returning AND there could be some additional costs for things like overtime (to help fill gaps) and training that would likely offset any savings in that regard.Email from Stuart Green, TTC Corporate Communications, November 26, 2021
From another source, I have learned that about half of the operators who were affected by this have begun the process needed for their return to work. Previously, I reported that the TTC planned to fill 190 crews in November-December on an overtime basis. As the workforce returns, overtime costs should drop.
The evolution of the budgeted and projected revenues and costs is shown in the following charts adapted from the TTC financial reports as of April 30, June 30 and September 30.
In this chart, the purple bars show the budgeted values while the other colours show the evolving year-end projection in each of three financial reports.
Of note on the revenue side of the ledger:
- Projected fare revenue (for the conventional system) has grown slightly since the April projection, most notably in the September value.
- There has been a decline in projected ancillary revenue (parking, rent, etc.) but this is very small compared to the fare revenue.
- Wheel-Trans fare revenue is a very small part of the total.
- The revenue before the reserve draw shows an increase in September that is the combined effect of stronger fare revenue and a small decline in ancillary revenue.
- The total revenue, however, is flat because the reserve draw has been discontinued thanks mainly to the strength of fare revenue.
On the expense side:
- Note that the vertical scale of this chart is over four times that of the revenue chart above.
- Operating expenses for the conventional system have been declining from budget projections through the year, and there is a smaller decline in Wheel-Trans costs.
- The reserve contribution, new in September, reverses the decline in expenses by taking money that was expected to be spent in 2021 and putting it into the reserve for the future.
Another way of looking at these numbers is to track the percentage variance against budget for each line. In this case both the revenue and expense lines are charted together because the range of values is comparable.
- Because the base numbers vary, these bars are not directly comparable to each other. They only show the percentage change in each budget line. For example, Wheel-Trans brings in very little fare revenue, and so a large variance does not represent a large dollar value.
- The Revenue and Expenses bars do not include the change in reserve draw or contribution, and therefore, show the actual operating projections without accounting adjustments.
In a previous article on the November service changes, I included a table showing the scheduled weekly hours of service through the year. Here it is again:
The total service operated has been running below the budgeted level all year, and with the changes implemented on November 21, the drop in weekly hours is greater. In December, the change is not as great because the original budget already included holiday cutbacks.
Although the construction service varies from the original budget, it is a relatively small part of the total and is in many cases funded from the capital rather than the operating budget. It is common for this component to vary considerably because actual requirements are often much different from what was anticipated a year ago when the budget was crafted.
The big issue here is not as much the amount of service operated, but the quality. I have written extensively about problems with service that are the bane of riders, but which receive scant attention from TTC management including:
- Bunching of buses and streetcars causing long gaps followed by two or more vehicles.
- Uneven loads due to bunching with the result that the average experience is of a crowded vehicle even though “on average” the load per vehicle might be acceptable.
- Missing vehicles due to a shortage of operators causing long gaps in service.
There are a few stock answers to these complaints including the need for more transit priority and red lanes, as well as claims that “Run As Directed” buses (which do not always appear in service tracking data) are used to deal with problem areas. There are several difficulties with claims about RAD buses:
- There simply are not enough of them to “plus the holes” on every route. In the October schedules, there were about 100 of them each day spread over three shifts. It was quite common to hear them spoken of as if they were all in service at once, but the actual number of concurrent RADs topped out at about 40 per cent of the total.
- There has been no tracking nor reporting of how the RAD buses and operators were actually used, nor of how they might have reduced crowding.
- RAD buses also doubled as subway shuttles and for other emergencies reducing their availability to backfill for missing regular service.
In any event, they have been dropped from the November 21 schedules and can no longer be invoked as an explanation for how service problems might be addressed.
During the public consultation for the 2022 Service Plan, the top-ranked issue for riders was service reliability. This is an issue across the system, not merely on a handful of routes that might be lucky enough to gain red transit priority lane sometime in the next five years.
With the focus on cost containment at the TTC, it is ironic that a new report on the TransformTO Net Zero Strategy includes:
Increase existing bus and streetcar service levels to encourage shifts to low-carbon, sustainable transportation.
The TTC’s 5-Year Service Plan and 10-Year Outlook aim to move people more efficiently on transit using enhanced service levels and priority bus lanes to improve reliability, speed and capacity on some of the busiest transit routes in the city.
Increased transit service will improve access to employment, healthcare and community services, encourage shifts away from single-occupancy vehicles and improve transit equity.TransformTO Net Zero Strategy Short-term Implementation Plan 2022-2025, point 9.
Improvements do not come one corridor at a time, year by year, but on a system-wide basis where existing riders everywhere will see improvements, and would-be riders will hear glowing stories of transit’s excellence rather than a daily litany of complaints about TTC service.
The Need For Better Service Standards, Reporting and Management Accountability
Regular readers will know of my increasing frustration with the quality of service provided by the TTC. This is not just the raving of a transit advocate with too much covid-era time on his hands, but a widespread complaint from riders that I hear in many forums.
Sadly, the TTC seems to shrug its shoulders and say “these are hard times” and leave riders to stew. That is an abdication of management responsibility especially now that we are supposed to be in “recovery mode” not just trying to keep the lights on.
The TTC board has been complicit in this situation. Good governance dictates that boards set policy and management implements that policy. Some board members are quite firm in maintaining that distinction. Where the problem lies is that the board must actually set policy and expectations, and measure how management performs, not just sit back and hope for the best. Where there are metrics, the board should understand what they actually mean, and how (if at all) they reflect transit service from a rider’s point of view. That is, after all, what they are selling.
There are many problems with existing service quality metrics including:
- Surface route service is measured against on time performance at terminals, and service only has to hit a rather wide target some of the time. There is no measurement of actual headway reliability (the spacing between vehicles) which is what riders see (or more often don’t see), especially as vehicles move along routes from terminals.
- There is no measurement of significant gaps, bunching or missed trips, all factors that affect the rider’s experience.
- Subway service is measured against a target that is hard to miss, and which under-reports the effect of significant delays and missing trains.
- Vehicle crowding data are not correlated with service reliability to determine how much these factors interact.
- Measurements, including the Daily Customer Service Report, are stated as all-day averages and mix results from periods and routes where disrupted service might be expected with those where conditions are benign. This shows an average performance, but riders do not ride “average” service.
- The CEO’s report claims that short turns have all but disappeared. This is contrary to actual rider experience and information that can be gleaned from tracking data. The situation has improved over the years. However, in some cases, service can actually be improved with a properly managed short turn rather than simply issuing an embargo to make the stats look good.
- Vehicle utilization is reported against scheduled service levels rather than actual fleet size. This disguises the considerable surplus within the bus, and to a lesser extent streetcar, fleets and the scope for service improvement that could be achieved if only the TTC utilized more of its vehicles. Management should have to justify the number of spare vehicles and compare this with industry standards.
- Some targets are absolute (e.g. number of road calls for buses and streetcars per day) when they should be relative to the amount of service operated (a rate of failure rather than a count). During a period when fleet utilization is well below historic levels, it is easy to get a lower failure count simply because there are fewer buses and streetcars on the road.
- There is no report of the frequency and trends of major delays by type, time and location. Some of these are beyond the TTC’s control, but many reflect on operational and maintenance practices.
These are system wide problems that will not be fixed by a few cans of red paint.
This is not intended to argue that the CEO’s report should return to the days of inch-thick stacks of paper with every conceivable detail. In our online environment, we should be beyond this, but equally it should be possible to produce regular, current tracking reports for various aspects of system operations including route level data for public review.
The TTC board should demand better accountability from management for what is happening on their system.