At its meeting on April 14, 2022, the TTC Board will consider a report about the arrangements with Metrolinx for operation of Line 5 Crosstown. This line, at least from a budgetary standpoint, is expected to open late in 2022.
There is a long agreement between Toronto and Metrolinx about how the costs are shared and who does what, and a much longer Project Agreement between the province and Crosslinx, the private consortium that built and is responsible for maintenance of the infrastructure and equipment.
- Line 5 Eglinton – Train Operating and Funding Agreement
- Project Agreement between Ontario/Metrolinx and Crosslinx
Within the TTC report, these two documents are referred to as the “TOFA” and the “PA”.
Even with Toronto keeping any revenue the line generates, the net result will be an increase in the TTC’s costs. On an annualized basis, the net new cost to Toronto is $62.6 million annually. This is not surprising, but a fascinating point about this table is that the maintenance contract and other non-labour costs total $52.8 million while the labour and benefits for TTC staff (station, on-train, supervision) amounts to only $26.4 million.
This illustrates the substantial cost of owning and maintaining infrastructure as opposed to running the trains.
Responsibility for aspects of the route are divided among the parties as shown below.
A Question of Service Levels
The costs shown above are “based on commencing service at Service Level 1 and moving to Service Level 2 in 2023 … as outlined in the Project Agreement” [TTC report at p. 3]. However,
… discussions between TTC and Metrolinx are on-going about opening the Line at a higher service level, particularly Service Level 6. The TTC will update the Board if there is any change to the opening day service level and implications to TTC’s plans with service commencing at a higher service level. The commencement of service at a higher service level will not impact the terms of the TOFA [Train Operating and Funding Agreement], which is the subject of this report.
TTC Report at p. 5
And what, you might ask, are these “Service Levels”? They are supposed to appear in Schedule 15-1 of the Project Agreement. Here is what that schedule looks like. Yes, the entire schedule is redacted. And, no, despite the injunction in the footer, I have not asked for permission to reproduce it here. Bite me.
From another reference in the agreement, it appears that there are to be nine Service Levels, but we do not know what these are. However, they play a role in various formulae that determine how much the consortium will be paid. If Toronto and the TTC wants more service, the bill will go up. However, we don’t know by how much, or even if the budgetary figures shown above represent what will be operated in 2023.
We are in a situation where the cost of running better service, indeed even the base level of service against which a change might be measured, is redacted in the “economic interests of Ontario”. Remember this while you wait for a train to show up, or if the TTC has to make service cuts elsewhere in the network to pay for Line 5.
The proposed TOFA includes:
5. Lifecycle Costs
• Metrolinx is responsible for all lifecycle maintenance costs of the Line 5 Eglinton, including lifecycle maintenance costs associated with acceleration of service levels due to increases in ridership demand.
• In the event changes to service levels are requested solely by each Party, which are not driven by ridership demand, the Parties will work together to mutually determine the associated incremental costs, including operations, non-lifecycle maintenance and lifecycle maintenance that will be paid for by the Party requesting the change.
[…]
11. Service Levels
• The TTC conducts an annual service plan review, and will include Line 5 Eglinton to observe the entire TTC network.
TTC Report at p. 19
• Service levels will be established in accordance with the pre-determined service levels in the Project Agreement.
• Any service level changes recommended or requested by each Party will be reviewed and agreed between the TTC and Metrolinx, with final authorization provided to CTS by Metrolinx in accordance with its role as owner of Line 5 Eglinton.
It is not at all clear whether Line 5 will operate to TTC service standards either for surface or rapid transit lines, of if a lower standard imposed by Metrolinx will apply unless Toronto shells out for better service.
The Complexity of a Multi-Party Agreement
Ontario, with a love for public-private partnerships, has created a structure where much of what, on a consolidated system like the TTC, would not have to be specified in detail. The difficulties lie in contractual responsibilities for who does what, who manages whom, and who pays. The Train Operating and Funding Agreement is still in development even though, if earlier schedules were to be believed, we would be only months from opening. Note the future tense in the following text:
[…] the TTC is currently working closely with its partners at the City of Toronto and Metrolinx to develop the TOFA, which will consist of an operations scope (service to be performed by the TTC), and a commercial scope that will address the funding of O&M expenditures of Line 5 Eglinton.
TTC Report at p. 7
The co-ordination between parties is described here:
It is critical to note that Project Co. has a contractual relationship only with Metrolinx. The TTC and Project Co. do not have a direct contractual relationship. However, the TTC is building working relationships with Project Co. through the joint goal of delivering the LRT lines safely and efficiently.
In this model, Metrolinx has full control over the Maintainer of the Line, and the TTC is reliant upon Metrolinx for the enforcement of maintenance standards, including but not limited to maintenance of equipment, infrastructure, assets, fleet, etc. Metrolinx, through Project Co., is responsible for corrective and preventive maintenance of Line 5 Eglinton, and for resolving any maintenance-related issues observed by the TTC that are brought to the attention of Metrolinx and Project Co.
TTC Report at p. 7
And here:
Co-ordinating with the Maintainer – The TTC will not be responsible for any maintenance-related activities or functions of Line 5 Eglinton, as this will be under the purview of Metrolinx, and based on obligations outlined in the Project Agreement (PA), which exists between Metrolinx and Project Co. To ensure all parties continue to deliver a seamless customer experience, the TOFA and PA have specified various meetings and committees to ensure collaboration amongst the TTC, Metrolinx and Project Co. For example, the parties are required to meet on a daily basis to co-ordinate daily operations and maintenance activities, and any special events, and to discuss previous day’s performance of Line 5 Eglinton. These forums will provide the TTC with the ability to communicate any issues or concerns with maintenance activities to mitigate any impact on operations. Metrolinx will be responsible for the enforcement of the maintenance standards with Project Co. through the various mechanisms outlined in the PA.
To ensure the delivery of its Operator Services, the TTC is developing a Quality Management System (QMS) to manage and oversee the quality of its Operator Services for Line 5 Eglinton. The QMS will define processes, methods, key performance indicators, etc. to ensure quality assurance and quality control of the TTC’s processes.
The TTC continues to collaborate with Metrolinx to ensure that there is co-operation between the parties in anticipation of the opening of Line 5 Eglinton, with the over-arching objective of ensuring a seamless customer experience.
TTC Report at p. 8
Some of these activities, such as a daily review of performance, would (or should) occur even if the whole operation were within the TTC. On Line 5, however, each party will be checking whether they actually bear responsibility and/or costs. The litigious relationship demonstrated to date by Metrolinx and Crosslinx does not bode well for this process.
It is mildly amusing that the TTC is responsible for a “Quality Management System” for Line 5 considering that it is woefully unable (or unwilling) to do the same for its own network as shown in many articles about service quality on this site.
The lack of transparency in this process is identified as a “key risk”.
The other major component of the overall TOFA is the commercial scope, which defines the City’s obligation to fund all operating and non-lifecycle maintenance costs of Line 5 Eglinton, in exchange for receipt of farebox revenues and non-farebox revenue. The City (with support from the TTC) has led the negotiation and development of the commercial terms (see Attachment 1).
The commercial terms of the TOFA expand upon the principles of the 2016 AIP [Agreement in Principle], specifying the parameters for the City’s funding obligations, such as renewal and dispute terms, liabilities for non-fulfillment of obligations, and revenue and payment processes. The commercial terms also outline the TTC’s role in fare and service-level setting. For example, the commercial terms note that TTC will have the ability to set fares on Line 5 Eglinton in accordance with TTC Fare Policy and structure that is used for the entire TTC network. This will ensure a seamless customer experience, as any fare policy changes that apply to the TTC network will include Line 5 Eglinton.
A key risk that the City and the TTC continue to navigate through is transparency regarding obligations in the Project Agreement that would be assumed by the City and the TTC. The publicly available version of the Project Agreement redacts certain areas of the Project Agreement due to the commercially sensitive nature of the information within those sections. Among the redacted sections are a maintenance activities schedule and a payments schedule (inclusive of penalty structure). Metrolinx assures the City and the TTC that the TOFA will clearly outline funding and operating obligations that the City and the TTC will be responsible for, including the applicable maintenance activities and payment schedule, and will be consistent with the attached Term Sheets. The City will not assume obligations from the Project Agreement that are not outlined in the TOFA.
TTC Report at p. 9
Even if Toronto and the TTC had been excluded from the operating agreement and this had gone to another private company, the complexity of responsibility and opportunities for finger pointing would remain, albeit under a blanket of Metrolinx confidentiality.
What actually happens over coming years will depend, in part, on whether Metrolinx tries to make these arrangements work to the overall public benefit, or continues with a secretive and combative style evident in so many other parts of its mandate.
Steve Munro 
The city can expect an increase in property tax revenue along the route from existing and developments coming soon to a station near you. The value of the buildings will also increase.
While the retail businesses got hit from not only the construction but by COVID-19, if they had enough in reserve, expect an increase as business returns.
Steve: When the value of existing buildings increases, it does not yield more tax revenue due to the way that Market Value Assessment works. Areas where assessments rise faster than average can see higher taxes, but this is offset by reductions elsewhere to make a zero sum result. Only new buildings or major renovations trigger net new tax revenue.
Retail businesses depend on walk-in trade. The Danforth was depressed for many years after the subway opened because of changes in travel/transfer patterns.
LikeLike
Shades of our little book on route costing! A lot of that is hidden in this report between TTC and Metrolinx. Without going back to our book, I believe the route cost centres were: vehicle hours, vehicle miles, vehicles, route costs (track, signals, stations including escalators), fixed costs (independent of route, e.g., carbarns, central office, [and Metrolinx excess brass]). Cheers, Andy
LikeLike
Given the cost different of labour vs utilities and traction power, do you think it would have been better to build the tunnelled section as an automated light metro and forcing linear transfers onto buses, with extensions planned? Or is having a single crosstown line with capital cost savings from surface sections (especially if the Eglinton West Extension was done on the surface as planned) still a superior choice in terms of delivering the best transit per dollar?
Steve: The original plan, of course, was for a network of LRT lines including the replacement of the Scarborough RT (which would actually have been the east end of the Crosstown line) and a separate Scarborough-Malvern line from Kennedy Station up to Malvern via UTSC. The whole idea was that, yes, there would be an unavoidable expensive central section, but that the economies and speed of construction on the outlying parts would offset this. Metrolinx attempted to sabotage this plan pressing behind the scenes for a light metro across the entire city with fewer stops than what was actually built seeing it as a regional rather than a local service. Only the intervention of Mayor Miller and Premier McGuinty put a stop to that.
I think that the “savings” of an automated line are overstated when one considers that the net saving in train driving staff is fairly low, and this would be offset by the extra maintenance and security staff for underground, unmanned operations. There are some advantages in service frequency provided that the alternative might be infrequent crewed service, but Eglinton is not that sort of corridor, certainly not in the central portion.
LikeLike
Biggest mistake is to use TTC employees. They don’t know the meaning of customer service any more than TTC management does. Over paid as well. Should be turned over to Bombardier same as GO trains.
LikeLike
“Raymond in Etobicoke” comment that “biggest mistake is to use TTC employees” seems to be one who would rather have workers who get paid minimum wage do work for him. Or worse, return to slavery. With the TTC employees you actually have experience and people who actually know the job. They have many “rules” and “regulations” that they have to follow, as well as safety, and knowledge, that we pay for.
LikeLike
Reply to “wklis” re: minimum wage workers. No such thing. GO employees are NOT minimum wage earners at all. Far from it. However, $45 an hour (plus all the overtime you want) to drive a TTC vehicle is far from “slavery”. As far as “rules” and “regulations” go, the enforcement of these is minimal if any. What TTC people and ATU members need is some competition in order to get them to clean up their act. Customer service is ignored far too often. It is no wonder so many people will not use TTC. Uber etc. would starve if TTC employees AND management treated the customer like they should.
Steve: Actually, “all the overtime you want” has not been the operative term recently as TTC clamps down on overtime at the expense of fielding service. They try to have it both ways, holding down the headcount, but when there are not enough crews to fill the work and they won’t pay overtime, runs go unfilled. They saved enough last fall to make a substantial down payment into a reserve account as a hedge against 2022.
LikeLike
Raymond in Etobicoke knows little about TTC operations and management. The hourly wage is about $35. per hour. Each Flexity streetcar is 98 feet long and weighs 106,300 pounds. Try operating that 8 hours everyday in heavy downtown traffic with a full passenger load avoiding collisions with careless drivers and you (Raymond) would say the job is worth a lot more. If a customer complains, you’re in the boss’s office the next day to answer the complaint. If the boss sees fit, you’re suspended without pay for a few days unlike teachers or cops who might be suspended for months with full pay. If Raymond feels under-paid and under-appreciated, then visit the TTC employment office at Bathurst and Davenport and see if you can pass the interviews, background checks, strict tests and training. They are hiring now.
LikeLiked by 3 people
Any update on an opening date for Line 5?.
Steve: No.
LikeLike
One more thought on the discussion with Simon H and Steve about automated operations. Automated operation has the largest cost advantage where construction costs are relatively low, especially if fixed operating costs like station security are also low.
Think for example the original Vancouver Skytrain line which was largely elevated and on an old right-of-way: it had relatively low construction costs and the above-ground stations are largely unstaffed which contributed to low fixed operating costs. At that point, automated operations that allow running a short train every 3 minutes for a similar cost as a longer train every 6 minutes are a noteworthy service-for-money win.
Perhaps the closest thing to this underground these days is the Copenhagen Metro, which is pretty light and has been built mostly underground for much cheaper than in Anglosphere for a number of reasons well documented elsewhere.
In case of Eglinton, the central section is underground because no politician wanted to cover all of central Eglinton with an overhead structure, and the construction costs in Toronto have really blown out. At that point, the ratio of operating cost of running more staffed service to the capital cost and the fixed costs of underground stations is lower than it would be otherwise, so savings from automated operations would be _relatively_ low.
Toronto is unfortunately not blessed with many vacant right-of-ways that would allow permanent ground-level or above-ground transit, so unless we get the political will to drop our construction costs to Nordic levels, there won’t be much advantage in going with light automated transit.
LikeLike
I wonder if Raymond in Etobicoke has ever tried to buy a Presto card at Exhibition GO station? GO has customer service when it suits them.
LikeLiked by 1 person
I think that it would be better to outsource the operation of this new line to a private sector company because the TTC cannot even properly run the lines that it already operates and I don’t think that the TTC can handle more.
LikeLike
Can anyone tell me what the benefit of this complicated, multi-level, multi-agency, multi-agreement transit system is? It’s not cheaper to operate. It’s not cheaper or quicker to build new lines. It’s less transparent. It won’t result in any better service. And there seems to be a lot of potential disagreement as to who is responsible for what. So, besides benefitting lawyers, what was the point of Metrolinx’s involvement again, especially for a local transit line that runs entirely inside Toronto?
Steve: A political and managerial power grab, coupled with a naive belief that 3Ps can work wonders.
LikeLike
I wish that consideration be given per the cost of the Crosstown in terms non-financial; theme being, potential cost to wildlife, and to security of L.R.T. operations, accruing from grass’s installation in the right-of-way. At first, I thought grass represented a good idea, although, perhaps, eventually an overbearing maintenance burden if conscientiously tended. Grass is aesthetically pleasing, certainly; and may provide some mitigating contribution against greenhouse gasses’ accumulation in the atmosphere, however modest that contribution. (I have, however, this Spring seen the grass being cut with use of what appeared to be a gasoline-powered mower.) Of greatest concern to me, is that the grass dangerously may be perceived by grazing wildlife, as being attractive pasture. I’ve noticed evidence of a likelihood that will happen, a short distance east of Pharmacy Ave.
Often, Canada Geese graze on the lawn of Flexible Packaging Corporation’s plastics factory, and, sometimes, across the street, graze on a long, narrow strip of grass extending north-south by the easterly edge of the Petro-Canada service station. Monday, May 16, while walking alongside Eglinton in the late afternoon, I watched a goose actually walk, successfully, across Eglinton from the Petro-Canada property to the Crosstown’s right-of-way. On my return walk, 3/4-hour later, there was a goose sitting on Petro-Canada’s grass and having blood-stained feathers below and behind the right-ward-side wing, and with that wing disposed in an orientation not the usual at-rest position. A couple observing it from within a car on the Petro-Canada property, said it had been struck by a car and that they had contacted Agencies about it and were awaiting follow-up. The goose was clearly alive and alert but injured. I don’t know what ensued exactly, but wasn’t able to find it on Tuesday.
In addition, grazing occasionally can be seen west of Pharmacy Ave., in patches of grass alongside the sidewalk by Eglinton Square mall’s north parking lot. Moreover, there is at least one burrowing creature, a groundhog, apparently resident somewhere not far east of Pharmacy Ave.
The “environment” is about more than atmospheric gasses and climate change; it is about sufficiency of life-sustaining habitat more broadly. Therefore, I now believe that Metrolinx should not have planted grass within such an environment as the Crosstown’s mid-street right-of-way, and should not be planting, in future, grass within any similar rights-of-way: toward avoiding to induce (however unintentionally), wildlife into believing there are fine grazing (or burrowing), opportunities to be had; and toward avoiding to insert a corresponding complication into L.R.T. operations.
Beyond the above-mentioned: There seems to me to exist a promise that emergency-services vehicles would be able to cross the right-of-way if need be. A soft surface perhaps would hazardously bog them down. There is a wide concrete path spanning the right-of-way not far east of the Pharmacy station, but crews having need to cross the right-of-way of course may find their vehicles not ideally positioned to use such a path.
LikeLike