Updated December 20, 2023: As of today, Board member Ron Lalonde, whose term was to run until February 2025, resigned creating a vacancy that could be filled with a non-Tory aligned citizen member.

At its December 7, 2023 meeting the TTC Board considered a management report recommending the continued outsourcing of surface vehicle cleaning and servicing. This proved to be a very contentious issue triggering a long in camera session after which the recommendation was adopted in part, but with one amendment, and on a split vote.

Background

Outsourcing of bus cleaning began under CEO Andy Byford as an outgrowth of Toronto’s core services review. It began as a pilot at Mount Dennis and Malvern garages, and from November 2013 was expanded to the (then) full seven garages. When that contract expired at the end of 2017, a new contract was signed covering the period to the end of 2023.

In 2020, as part of the Covid response, the work of disinfecting all vehicles, including streetcars and subway trains, was added to the contract.

Cleaning and servicing of streetcars was added to the contract in September 2021 with a December 2023 end date, and an option for two additional one-year terms. Starting in January 2023, midday in-service streetcar cleaning was added as part of “TTC’s action plan with respect to community safety, security and well-being”.

The contractor, TBM Service Group Inc., uses employees under Local 2 of the Service Employees International Union, and pays wages higher than the statutory minimum, but not as high as comparable work that would be done by Amalgamated Transit Union 113. ATU claims that this work is rightfully theirs, and that the TTC is in breach of contract by outsourcing it. This is a long-standing dispute.

TTC argues that TBM’s employees are 40% female and 85% visible minority, but this does not speak to what the breakdown might have been had the work stayed with ATU. For their part, ATU argues that the cleaning and servicing positions were entry level jobs to the TTC which are no longer available.

TTC also argues that having ATU staff perform these functions created problems at garages because of staff shortages. When other maintenance workers filled in, this left repair work unfinished. The TTC argues on the basis of efficient staff usage without addressing why they were short cleaners in the first place.

TTC also claims that vehicle reliability has gone up over the outsourcing period, but does not address other possible factors such as:

• the average fleet age which has been falling as the shift to a 12-year replacement cycle builds into the system,
• the under-utilization of the fleet thanks to pandemic-era service cuts allowing the worst performing buses to be sidelined,
• the opening of McNicoll Garage relieved bus crowding at other locations that interfered with efficient maintenance.

The TTC acknowledges that the work model implemented by TBM is an improvement over past TTC practices, and they would adopt it although costs would rise because of higher ATU wage rates.

TBM has since refined the business model to adopt a production line approach utilizing dedicated workforce to perform each activity. If the TTC were to perform servicing and cleaning in-house, the TTC would be inclined to adopt a similar business model as TBM to ensure continued success of KPIs. Using TBM’s business model, the TTC would need to increase its workforce compared to the 2012 business model. The expected cost avoidance of second sourcing with the updated workforce model is approximately $101.83 million over the contract term (2024-2028) or an average annual cost avoidance of $20.37 million.

Appendix A – Bus and Streetcar Servicing & Cleaning – Benefits & Performance p. 5

Leaving aside the question of cost, this begs the question of whether the TTC was attempting to make do with fewer staff than needed when the work was in house.

The 2023 Bid Call

In June 2023, the TTC posted a call for bids for Bus Servicing and Cleaning at its nine garages (including the WheelTrans Lakeshore Boulevard East). The Scope of Work noted that “Additional maintenance facilities may be added throughout the term of the Contract.”

This bid closed in August 2023, and only two potential vendors responded, one of which was the incumbent provider who had an obvious advantage in meeting the bid requirements. This brings us to the new contract before the TTC Board.

Much of the debate was held in private as is allowed where commercial issues and labour relations are involved. There was time pressure because December 7 was the first day of Hanukkah, and two Board members who opposed the contract wanted to leave. When the public session resumed, Commissioner Dianne Saxe moved a three-part replacement for management’s recommendations. Both versions are shown below, with changes underlined.

Original:

1. Authorize the award of a contract to TBM Service Group Inc. with an upset limit amount of $107.0 million, inclusive of HST, for bus servicing and cleaning services at nine TTC city bus garage facilities for a five-year term commencing January 1, 2024 on the basis that is was the only qualified bid received.

Saxe motion:

1. Authorize the award of a contract to TBM Service Group Inc. with an upset limit amount of $107.0 million, inclusive of HST, for bus servicing and cleaning services at nine TTC city bus garage facilities for a two-year period commencing January 1, 2024 with three additional option years. After the initial two years, subject to the competitive bid process as set out in 3, provide ATU Local 113 the opportunity to bid on the bus servicing and cleaning services contract.

This failed on a 4-5 vote with Commissioners Saxe, Matlow, Myers and Moise in support; Commissioners Holyday, Lalonde, De Laurentiis, Jagdeo, and Osborne opposed. Commissioner Ainslie was not present.

Original:

2. Authorize the contract option with TBM Service Group Inc. for up to two-years, from January 1, 2024, to December 31, 2025, for streetcar daily servicing, midday and detailed cleaning, and increase the contract value by $7.7 million, inclusive of HST, accordingly.

Saxe motion:

2. Authorize the contract option with TBM Service Group Inc. for a one-year period, from January 1, 2024, to December 31, 2024, for streetcar daily servicing, midday and detailed cleaning, and increase the contract value by up to $4 million, inclusive of HST.

This passed on a 7-2 vote with Commissioners Saxe, Matlow, Lalonde, Myers, Jagdeo, Osborne and Moise in support; Commissioners Holyday and De Laurentiis opposed.

Saxe motion:

This part was not voted on as it applied only as a condition on part 1 which was not adopted.

3. Before December 2024, ensure that:
   • a. ATU Local 113 is given a fair opportunity to make a complete, competitive bid for bringing the same work in house, and to present that bid to the Board.
   • b. After consulting with ATU Local 113, staff provide a complete financial comparison of in-house and out-sourced bus and streetcar servicing, including the TTC resources that support or liaise with the contractor, are related to the contract or that otherwise would not be incurred if the work were done in-house, and
   • c. Staff provide a comparison of in-house and out-sourced options in terms of:
     • i. Work quality;
     • ii. Worker training and qualifications;
     • iii. Worker recruitment, especially for women and disadvantaged groups;
     • iv. Workflow coordination and efficiency, and
     • v. Toronto’s Fair Wage policy.

The effect of these motions is that the five-year bus cleaning and servicing contract was awarded as proposed by management, but the up-to-two-year streetcar contract was awarded only for one year. The proposal to guarantee ATU Local 113 the right to bid and present their proposal to the Board was not voted on as it was only attached as a condition to the motion regarding bus cleaning, not streetcar cleaning.

The fact that it was even proposed suggests that Local 113 has not been given the option to make a counter-proposal and that some Board members wanted ensure that this occurred. However, that part of the motion as drafted is moot because it depended on the change in the bus cleaning portion of the contract.

Procurement is a delicate business, and direct Board involvement can lead to dubious situations as we have seen in the past when bidders attempt to bypass management and woo Board members directly. In a labour relations situation, this is more complex because the union already has a relationship with the Board, one that can be leveraged in bargaining especially now that legislation removing TTC workers’ right to strike has been overturned (this decision is under appeal).

The Political Makeup of the TTC Board

The TTC Board contains six members of Council and four “citizen” members appointed by Council on the recommendation of its Civic Appointments Committee. In practice, this committee’s function was to ensure that only applicants for various public positions fitted in with the then-prevailing desires of Mayor John Tory and his de facto party on Council.

Two of the four citizen members were up for reappointment in early 2023, and the usual search for other interested parties was conducted. To no great surprise, the two incumbents were recommended to Council. The vote to approve their new terms came on June 14, twelve days before the June 26 Mayoral by-election that brought Olivia Chow to office. She was formally sworn in on July 12.

A motion to defer appointments at the June 14 Council meeting until after Mayoral by-election failed 12-13 along partisan lines. The citizen members now on the Board are:

• Joanne De Laurentiis: Appointment renewed February 2, 2021, ending February 4, 2025.
• Ron Lalonde: Appointment renewed December 15, 2021, ending on February 4, 2025.
• Fenton Jagdeo and Julie Osborne: Appointments renewed June 14, 2023, ending on June 16, 2027.

The Councillor members of the Board (Myers, Matlow, Ainslie, Saxe, Moise and Holyday) were appointed by Council at its August 21 meeting for a term ending December 31, 2024.

These appointments are all “at pleasure” and could be rescinded, but in practice that would require truly unusual circumstances that certainly do not apply here.

Although Mayor Chow may have a working majority on Council, this is not necessarily true on the TTC Board. Her choice as TTC Chair, Councillor Jamaal Myers, has challenges on any politically contentious issue. This will be interesting come the TTC budget meeting on December 20. Will the Board advocate for better transit service, a key Chow platform, or will they act as an anchor on the options management, and hence the Board, presents for consideration?