Updated November 17, 2017 at 6:30 pm
The TTC Budget Committee met today and considered the draft 2018 Operating Budget. Between the original release (described later in this article) and today’s meeting, Mayor Tory and two members of the TTC Board endorsed the concept of a two-hour fare to replace the complex transfer rules now in place.
Although this was listed as the second item on the revised meeting agenda, Commissioner Mary Fragedakis moved that it be considered first. This re-ordering was a procedural move to forestall a standard tactic used at City Council where a motion setting the next year’s tax increase is introduced and passed before the budget which it will fund. The result is that any proposed budget changes must fit within the already-approved tax level rather than having taxes set after the budget is finalized. In this case, the motion regarding a two-hour fare was only a report request, and the order was less critical. That request passed by a vote of 3-1 with Budget Chair John Campbell in the negative as he opposes the two-hour fare scheme.
The meeting then turned to a series of deputations which, as these things tend to do, fell on largely hostile ears. A favourite tactic is to challenge members of the public to explain “how would you do it”, despite the fact that the issues are complex and do not fit within an answer of a few sentences. The Budget Committee itself cancels more of its meetings than it holds, and opportunities for an open debate about transit policy options and the budget rarely occur.
Beyond information already in the budget report, there were a few additional items of note in the staff presentation.
The Cost of the Vaughan Extension
This comes up from time to time, and it is clear that the Committee did not fully understand the costs and revenues associated with the extension.
For some time, a cost increase of $30 million annually has been cited for the TYSSE. However, the 2018 Budget only includes a $25 million bump because $5 million had already been included for start-up costs and operation in the 2017 Budget.
The $25 million comes from a combination of new costs, and revised revenues. The TTC now receives $8 million for bus services operated on contract for York Region, but those services will be assumed by the Region when the subway extension opens. The TTC will continue to operate the vehicles, but now at their own cost and so this is a net increase in costs because of the lost revenue. That amount is partly offset by a combination of $3 million in new fare revenue and $1 million in parking revenue.
The projected ridership for 2018 is 539 million, a growth of 3 million over the probable results for 2017, but below the originally budgeted target of 543.8 million. The change from 2017 to 2018 arises from several factors:
- 4.8 million rides due to economic growth
- 2.1 million rides due to service improvements and the GO Transit co-fare
- 1.5 million more rides by children (who travel free of charge)
- 1.2 million new rides from the TYSSE
- 0.5 million additional rides counted due to improved reliability of Presto readers
- Total: 10.1 million
Note that most of the expected ridership on the TYSSE will be by existing riders changing travel patterns, not by net new riders. This is further constrained because York Region Transit will continue to serve York University directly thanks to a lack of agreement on a co-fare between YRT and TTC. Riders who were anticipated to show up as YRT-TYSSE-YorkU trips will not be using the subway. It is ironic that there will be more new rides by children on the system as a whole than by riders on the subway extension.
Half a million rides were estimated to have not been counted in 2017 because failing Presto readers were unable to charge these fares. The TTC’s Brad Ross advises that these are
“rides not counted, assuming they still rode but couldn’t pay. The TTC is in the process of accounting for all lost revenue due to out-of-service Presto readers.”
- 0.5 million rides due to increased subway closures
- 0.7 million rides due to the elimination of the Public Transit Tax Credit
- 2.8 million rides due to decreasing sales of Metropasses and Day Passes
- 3.1 million rides due to a reduction in the average number of trips taken on each Metropass
- Total: 7.1 million
This provides the net increase of 3 million over 2017 probable results.
The budget has been drawn up on a conservative basis and leaves several areas where the outcomes in 2018 could be different than projected. The $14 million now sitting in the Transit Stabilization Reserve could be used to offset some of this risk, provided that Council does not scoop the reserve simply to hold down the subsidy increase.
Some of the items below refer to savings that allowed 2017 to show a “surplus” (actually a reduced requirement for subsidy), and these might not all continue into 2018.
The budget contains a provision for $4.1 million in extra costs through the provincially mandated payment for two emergency leave days per year. This has been estimated conservatively, and TTC staff advised the Committee that the worst case cost could be $18 million.
The History of TTC Budget Variances and Subsidies
For many years, the TTC has consistently come in under budget for the annual subsidy requirement. In the table below, the amounts are for the subsidies, not for the overall operating costs. This always leaves the TTC in a position for its next year estimates that a budget-to-budget subsidy flat-line actually represents an increase over actual requirements in the current year.
The subsidy per rider will go up in 2018 because of the fare freeze. Although this takes Toronto back to the level of 2010, that does not allow for cost inflation over that period which has been well above the CPI.