TTC 2022 Operating Budget: Board Meeting Follow-Up

Updated December 22, 2021 at 6:00 pm: The TTC has published the budgeted service hours through to December 2022. This information has been added to the section “When Will Full Service Resume?”

This article is a continuation from TTC 2022 Operating Budget picking up additional information from the Board meeting of December 20, 2021.

In recent years, budget development has been shaped by two factors: the constantly shifting outlook on the city’s economy in a pandemic environment combined with a Board that is predisposed to leave all policy development and analytical work to management. There is little or no advance discussion of budget policy and the entire package lands in the Board’s (and public’s) lap just before the holiday season and at a point where it must be approved to fit into the overall budget process at City Council. In 2022, the situation will be repeated because of the municipal election, and a new TTC Board will find one of its first major decisions will be to approve the 2023 budget.

When Will Full Service Resume?

For some time, TTC policy has been that full service would be provided once ridership hits 50 per cent of pre-pandemic levels. The system is already at 49 per cent overall, with the proportion varying by mode as shown below.

In these charts, the red line corresponds to the point of fare payment (the location where fare was first charged) while the gray line tracks “boardings” (transfer connections and other trips within the two hour window of fare payment). Note that these are percentages of pre-pandemic values, not absolute values.

The bus network overall is now at 60 per cent, streetcars and subways at about 40. This reflects the difference in areas served and the degree to which employment in bus-served areas does not lend itself to work-from-home arrangements.

More important, however, is that a 60 per cent average will mask times and locations where the value is much higher and much lower. The bus network, if considered on its own, already deserves “full service”, but was the victim of the November 2021 cutbacks and of the staff shortages that already existed. The disconnect between the real world of rider experience and management reports is that service is reduced system-wide even though the ridership loss is driven mainly by the subway. (The streetcar network has comparable percentages to the subway, but a much smaller ridership base.)

Statements about what would trigger a return to full service vary in subtle but important ways.

  • TTC policy says that a 50 per cent overall return of ridership should trigger 100 per cent service levels.
  • Actual staffing makes it impossible for this to occur before Q2 2022 even though ridership is likely to hit the 50 per cent mark in Q1.
  • In the 2022 Budget Highlights, the TTC states that the budget “Restores Pre-Pandemic Service Capacity in Q2 2022”. The operative word here is “capacity”.
  • In various places, the terms “in” and “by” have been used interchangeably, but they could imply “sometime within the quarter” as opposed to “by the beginning of the quarter”.
  • The commitment was further qualified by CEO Rick Leary’s statement during the Board meeting that a decision to resume full service would depend on ridership.
  • Later in the TTC’s press release, Chair Jaye Robinson is quoted: “The 2022 budget approved today gives us the flexibility to increase service up to pre-pandemic levels, in response to demand, while funding key sustainability and service improvement initiatives – all without raising fares for our riders.” This does not even commit to a Q2 return to full service, only that the budget headroom will exist for more service as and when the TTC decides to operate it.

An important caveat is that “full service” does not mean “identical service” because the pre-pandemic schedules no longer reflect today’s riding patterns in locations and times of demand together with a desire for some degree of distancing on vehicles.

As I write this, the planning memo detailing service changes for January 2022 has not been issued, and it is not yet known whether the TTC will even begin to restore some of the November 2021 cuts, a move that only a few weeks ago management claimed would occur.

Updated December 22, 2021: The budgeted hours for the 2022 schedule periods have now been published. See the table below. Note that service that is included in the budget is not necessarily operated as we saw through 2021. By September 2022, the budgeted regular service will be back to the same level as in January 2021 (186k hours/week).

How Much Service Do We Get Today?

CEO Rick Leary was happy to announce that despite the staffing problems, the TTC is fielding 90 per cent of scheduled service. On some days, they manage to hit 95 per cent. However, this is based on a reduced schedule effective November 21. Here are the numbers for the planned regular weekly service hours (excluding additions to cope with construction projects):

  • November 21, 2021: 165,859
  • October 10, 2021: 177,798
  • January 3, 2021: 179,130
  • January 5, 2020: 185,896

The difference between November 2021 and January 2020 is 11 per cent. However, the TTC is only operating 90 per cent of that scheduled service, and so what is on the street is 149,000 hours per week or 20 per cent below January 2020. Their ability to achieve service looks better when reported against a diminished schedule.

This is not to say that there are no fiscal problems with transit and the City’s ability to pay for better service. However, transparency requires that statistics be clearly reported, not spun to put the best possible light on the system’s performance.

A direct result of schedule cuts due to staff shortages, together with randomly cancelled services, is erratic service including the missing bus problem I have documented in many recent service analyses. Sadly, there was no discussion at all about problems of service reliability at the Board meeting even though the provision of “Safe, Seamless & Reliable Transit Service” is first on the list of 2022 service objectives.

“Customer satisfaction” and “Fiscal sustainability” are two key objectives, but these inevitably collide because service is provided based on available funding, not to hit a quality objective to please riders.

CEO Rick Leary routinely talks about “Run as Directed” buses, or RADs, as his solution to shortfalls in service capacity. He regularly overplays the effect that these have on the system.

  • A routine claim is that there are 140 RAD buses available to fill in on crowded routes. In fact there were 140 8-hour crews in three shifts with a maximum of about 60 buses at one time.
  • The RAD buses double as subway shuttles and vanish when part of the subway is not running.
  • The RAD buses are not trackable through transit smartphone apps, and riders cannot anticipate their arrival.
  • The RAD crews were cancelled in the November 21 cuts as a workforce reduction measure.

Updated December 22 at 6:00 pm: RAD crews will be partly restored in January 2022. There will be 61 weekday crews in all, but the maximum number of RAD buses at any one time will be 47 (weekday midday). There is only one weekend RAD bus on Saturdays and Sundays.

What Would Pre-Pandemic Demand Look Like?

A chart that appears regularly in TTC presentations tracks the crowding levels on buses using automatic passenger counter data (streetcars do not yet have APCs installed).

The version of the chart in the presentation deck is more recent than the one in the report. An important note here is that the pre-pandemic numbers in early 2020 do not show all of the vehicles crowded all of the time. Even during a period when overstuffed buses were a common complaint, less than 20 per cent of trips were loaded beyond 70 per cent capacity, and less than 60 per cent reached 30 per cent capacity.

This is a fact of life on transit systems. There are peak times and directions of travel, but one cannot schedule all of the buses to be full all of the time. This is a point missed by politicians who care more to reduce subsidies than provide all-day, everywhere service.

Indeed, the TTC’s Service Standards set a cutoff level for route performance not on peak load, but on the number of riders per vehicle hour. In the off-peak, a target of 10 boardings might represent a much lower peak load particularly on a short route with frequent turnover. There is a danger to say “look at all those empty buses” without acknowledging that they serve people somewhere else on their trip, and at a cost per ride that is acceptably low.

There is a danger that as ridership recovers, penny-pinching will lead to unattractive service on routes where demand is relatively light.

Service Does Not Run Itself

We hear a lot about how schedule adjustments will “fix” service problems. In some cases, this is true because schedules did not provide enough time for operators to make their trips, particularly in pre-pandemic conditions. However, schedules will not fix problems with buses running in twos and threes with no attempt by supervisors to space out service, nor will they fix gaps caused by missing buses. Schedule padding has reached the point where riders can see bunches of vehicles sitting at terminals because they are early and which, even then, manage to depart in pairs.

“Red lanes” for bus priority are another nostrum for our transit ills. Service could be better if only we had our own lane for buses. This runs headlong into three big problems. First, it will be decades before there is a network of red lanes large enough to make a systemic improvement in transit service. Second, the TTC must regard any transit priority as an opportunity to improve service with the vehicles they now operate, not as a chance for “efficiency” to reduce operating costs. Third, experience with reserved lanes today is mixed and shows that need for active service management does not disappear.

Better service requires three fundamental changes:

  • More service, especially on overcrowded routes
  • Better supervision of service including management of unplanned gaps (e.g. traffic related) and planned gaps (missing buses)
  • Reporting metrics that reflect on-the-street experience by riders at a granular level, not overall monthly system averages

To this I might add: a board that actually cares about holding management to account for the service they operate. The very things a transit system is selling – service and mobility – did not warrant a single word in the budget debate.

What Problem Will Lower Fares Solve?

One of the public deputations to the Board meeting noted that the service reductions are making work days longer and more arduous for key workers who travel by TTC. This remark was ignored, and instead the Board focused on whether reduced fares would bring back more riders.

The Board acts like a shopkeeper with a worn out window display hoping that a big “SALE” sign will draw back customers while flies buzz around the aging wares in half-empty cases.

Instead the discussion turned to lower fares and the high cost of a monthly pass compared to other cities. Commonly this is referred to as the “multiple”, defined as the ratio between a single fare and a monthly pass. This number varies depending on which type of pass and which fare tier one looks at.

For example, a single adult fare paid by Presto costs $3.20, while the monthly pass is $156.00. To break even, a pass holder must make 49 trips per month or more. On an annual subscription basis, the level is 45 trips/month.

Discounted fares such as Seniors and Youth have a higher multiple because the single fare discount is 30 per cent, but the pass discount is only 18 per cent. The break even point is 57 trips.

The premise is that if passes were cheaper relative to single fares, more people would ride. However, they would still face that same threadbare “shop window” with no improvement in service.

Coming Soon: Fare Capping?

If there was one positive outcome of the debate about pass pricing, it was that we had a preview of the pending Fare Policy report. This will appear as a status update to the Board in February 2022 with a final report in May 2022.

TTC staff will be advocating a shift from prepaid weekly and monthly passes to fare capping similar to what is already done on GO Transit and other system. A rider will not have to commit up front to buying a pass, but if their transit usage is high enough, their total weekly or monthly fare will be capped at a set value and all rides beyond that point will be free.

This is a major change in TTC fare pricing, one that was resisted in past years because it would guarantee equivalent-to-pass discounts to riders regardless of whether they bought a pass or not. The high pass price limited the market to extremely frequent riders who had no doubt that they would achieve break-even on their travel, or for whom the convenience topped a possible, if small, overpayment in lightly-travelled months.

The cap would be set at a different level depending on the fare class so that youth, seniors and “fair pass” holders would have individualized single and capped fares. The important difference would be the elimination of the need to pay for an entire month’s travel, on spec, up front.

An Unavoidable New Cost: The Eglinton LRT

Although the actual opening date for Line 5 Crosstown is vaguely described as “late 2022”, the TTC will incur costs for a pre-service period, notably for training, as well as operating costs from whenever the line opens to year-end. In 2023, there will be a further increase based on full-year operation less the one-time 2022 startup costs.

The line is projected to cost $63 million/year net of savings on the bus network.

The line between TTC and Metrolinx costs is not yet clear, and I have asked the TTC for a breakdown of what their portion covers. The Metrolinx share is a de facto operating subsidy even though it probably will not be booked as such.

Priorities for 2022

The overall TTC priorities tell us a lot about how they view their role. The slide may be titled “Service Priorities”, but there is very little about actual service improvement. One could argue that changes in various parts of the organization will allow more service to be operated, but there is nothing actually in the plan for system-wide improvements beyond the possible return to full service.

Matching service to demand can be read two ways including both improvements to what is there now, and as “better efficiency” in service provision to squeeze capacity out of the system.

The reference to vehicle maintenance capacity shows how the ebb and flow of new vehicle purchases can distort budgets and staffing. If there is a large pool of vehicles under warranty, then TTC can reduce its own staffing because repairs are performed under a warranty that was part of the capital budget (and partly funded from other levels of government). When warranties expire, staffing up to take on vendor-provided support is a net new cost.

Nothing in this list recognizes service quality as an issue that should be addressed. It will be interesting to see if anything arises from the Ridership reacquisition strategy in that vein.

The Continuing Effect of Covid

In 2021, the TTC received a huge amount of added subsidy under various Covid support programs. The bulk of the need has been to replace lost revenue from fares and ancillary sources such as advertising, rents and parking, plus added expenses to deal with covid such as cleaning and provision of PPE.

For 2022, the requirement is budgeted at $461.2 million.

This is expected to drop to $250.1 million in 2023 and $176.4 million in 2024 with lost fares remaining the largest chunk of the total.

In the same period there will be non-covid pressure from the opening and full-year operation of Lines 5 Crosstown and 6 Finch, full-year cost of services restored during 2022, and economic factors, primarily inflation.

These will drive an above-inflation funding requirement from the City of Toronto even allowing for subsidies from other governments.

One thought on “TTC 2022 Operating Budget: Board Meeting Follow-Up

  1. You say: “Updated December 22 at 6:00 pm: RAD crews will be partly restored in January 2022. There will be 61 weekday crews in all, but the maximum number of RAD buses at any one time will be 47 (weekday midday). There is only one weekend RAD bus on Saturdays and Sundays.” If this is really for the whole City one must ask “Why bother?”

    Steve: RADs are a very large collection of fig leaves with which the TTC covers its posterior against criticisms of spotty service. They are everywhere and nowhere. Rick Leary and others routinely talk of them as if they are all in service at once when the number they cite is a count of crews, not concurrent vehicles. I honestly don’t think that they understand (or want to know) the distinction between the two because counting crews makes the amount of service seem larger.

    Like

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