TTC Capital Program Review

Back in the early days of John Tory’s mayoralty, the 2015 budget discussions were overshadowed both by the legacy of the Ford administration and by major issues with project control at the TTC. From the Ford years, Tory inherited a mean-spirited attitude to transit spending and service cuts that the new mayor would come to reverse, for a time at least. A bigger issue, however, was the matter of runaway spending by the TTC on two major projects: the Spadina subway extension (aka TYSSE) and the resignalling contracts for the Yonge-University-Spadina subway (aka Line 1).

Even while the TTC’s CEO was coming to grips with these projects, Council passed a motion asking for a review of how the TTC was managing its business.

145. City Council direct the City Manager to issue a Request For Proposal to expedite a review of Toronto Transit Commission Capital program service delivery including:

a. a review of project management of Toronto Transit Commission Major Capital Projects in the past five years to determine actual project costs and completion dates relative to original schedules and estimated costs;

b. a review of staff reporting mechanisms to the Toronto Transit Commission and City Council related to capital project budget and completion date status; and

c. future organizational options for Transit project management and delivery of Major Capital projects related to Transit expansion and major State of Good Repair projects.

146. City Council direct the City Manager to co-ordinate the review in Part 145 above with the Chief Executive Officer, Toronto Transit Commission and to report to the Toronto Transit Commission no later than the November 23, 2015 Board meeting. [Item EX 3.4 Council meeting of March 10, 2015]

In the fullness of time, considerably later than the November 2015 date in the motion, a report from KPMG landed on the TTC Board’s agenda, the TTC Capital Program Review. This was supplemented at the meeting by a presentation from KPMG and a response from CEO Andy Byford.

The terms of reference for KPMG’s work were somewhat different from the Council motion.

KPMG’s scope was as follows:

  • review project management practices at the TTC with respect to the delivery of the Capital Program, and provide recommendations to staff that will assist the organization to improve capabilities for managing capital projects and programs. The TTC Capital Program Review seeks to achieve the following goals:
  • Improve the organization’s project and program management performance by learning from past experience;
  • Support continuous improvement efforts underway at the TTC, including the continued implementation of the TTC Portfolio Management Office (“PfMO”) established in 2014;
  • Assess project governance structure and protocols for reporting of project status, to ensure the appropriate level of transparency and accountability to project sponsors and stakeholders; and
  • Provide guidance on project delivery options and project management requirements for projects of varying size, scope, and complexity. [Presentation, p. 4]

Item “a” of the Council motion asked for a comparison of actual costs and completion dates with original plans. KPMG does not provide this information, and even worse, included a table of selected projects that does not clearly explain their history (see below). There is no “deep dive” into any of the projects and, therefore, no specifics that could be tied to “lessons learned”, to practices that created the problem in the first place.

The table below is the closest the report comes to commenting on Council’s request, but read in isolation it can be misleading. It is ironic that in their presentation to the TTC Board, KPMG did not include this table and made no comment  on it. CEO Andy Byford was not so kind, and emphasized that most of the scope changes were perfectly legitimate.

kpmg_ttc_project_list

Other projects included in KPMG’s review but not in the table above were:

  • Fuel Storage Tank Replacements
  • Subway Station Easier Access Phase III
  • Surface Track
  • On Grade Paving

Of these, only the Easier Access program was flagged as “Challenged” with the others as “Successful”, but the reason for the EAP’s status likely has more to do with the complexity of later stages of the work and a lack of funding than with project management and controls. [See Table 1 at pp. 20-21 of KPMG’s report]

Two of these (track and paving) are the only “Ongoing” programs reviewed by KPMG. These are fundamentally different from “Finite” projects such as the construction of a line or the retrofit of elevators to stations. I will return to this distinction later.

This is a dangerous table in that it shows an apparent growth from $5 billion to almost $8 billion in project costs, a 60% increase.  That was the easy headline in media coverage of this report, and the sort of simplistic comparison that some members of Council would seize on as symptomatic of “waste” at the TTC. Scope change appears as a “primary cause” in five of these projects, but not all such changes arise from the same circumstances.

  • TYSSE’s cost grew due to inflation between the original estimate and the eventual approval of the project, and of course because the line was extended from York University to Vaughan Centre.
  • There was a considerable delay between the approval and actual start of work thanks to foot-dragging by senior governments in finalizing their contribution agreements. No adjustment to the completion date nor allowance for inflation was added to the estimate.
  • Politicians along the line wanted showcase stations, not the standard TTC boxes, and much of the contingency in the project’s budget was consumed by unexpectedly high bids for these structures.
  • The TYSSE project suffered from poor organization with many contractors on competing deadlines. This arose in part because the prevailing wisdom at the time was that work should be parceled out in small enough pieces that multiple mid-size contractors could bid. This arrangement was more a political decision than a technical one.
  • The original project did not foresee a conversion to Automatic Train Control (ATC) because that was not part of the TTC’s plans at the time. This item was added after the fact under a separate project budget, but this work added yet another layer of complexity to overlaps between many subsystem installation contracts.
  • The original fleet plan for TYSSE included the continued use of a portion of the older T1 fleet on the YUS with most, but not all, of the trains coming from the new TR order. After the decision to implement ATC, the T1s were no longer suitable because of the high cost of retrofitting ATC to them, and the TR contract grew accordingly. The TTC has a surplus of T1s, but no place to use them, including the proposed Scarborough subway which will also have ATC. The planned opening date for the SSE occurs well before the planned completion of the replacement of the T1s, a project that will have to be accelerated shifting spending into earlier years than planned.
  • The TTC now has a much larger subway car fleet than foreseen a decade ago thanks to the T1 surplus and cars for improved service under ATC that will not actually be used until 2019 and beyond when the ATC project completes. Additional space will be needed for the T1 replacements that will require concurrent storage space and a significantly different carhouse design from Greenwood Shops. These projects are not yet funded, and are not fully included in the cost estimates for the SSE.
  • The TR purchase, like all TTC vehicle contracts, includes a base order plus an option for additional vehicles. This is a standard arrangement for procurement because the TTC never receives full funding for its plans in one go, and circumstances change causing quantities to go up, or occasionally down. The complete order now includes enough trains for the complete replacement of non-ATC capable trains on YUS, conversion of the Sheppard subway from T1 to TR operation, the Spadina extension to Vaughan and additional trains to run more frequent service once ATC is in use on YUS.
  • The ATC contract evolved out of a dog’s breakfast of plans for new signalling on the YUS. Originally, the plan was simply to replace the aging block signal system on the original part of the line. However, funding for this could only be obtained by misrepresenting necessary maintenance work as something that would enable additional capacity. Eventually, the project grew to have at least two overlapping technologies being installed at the same time so that non-ATC operations could co-exist on an ATC line. This proved unworkable, and the contracts were consolidated into a single ATC project. The extra costs are a direct result of, first, underscoping the project for political reasons, and later from a failure to appreciate the technical complexity of what was being attempted.

The above are only the high points of a much more complex history (available in the linked articles), but what should be evident is that major projects interact with each other even though they are almost always discussed as if they are completely separate entities. This is a major problem in TTC budgeting and in the political context where such projects are debated. KPMG hints at this problem in its review, but does not drag any details out into the open.

The following discussion can only touch on the full report of 273 pages, and is intended to place the report more in the political context of the TTC Board and Council (and through them to the ongoing debates about TTC funding) than KPMG which tended to focus on internal issues of process.

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TTC Service Changes Effective Sunday, September 4, 2016 (Updated)

Updated August 15, 2016: The detailed table of service changes has been added to this article.

September 2016 will see a return to the “winter” schedules on most TTC routes. Despite talk of service cuts in the budget process, the new schedules include some improvements to correct for operational problems on a few routes, and to better handle existing demand. The scheduled mileage for September is actually above the budget level due to greater than anticipated requirements for diversions and extra vehicles to deal with construction projects.

2016.09.04 Service Changes

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A Rainbow of Rapid Transit

In Toronto’s never-ending fascination with new transit maps, the City Planning department has released a vision for our rapid transit network as it will be in 15 years.

201602_15YrPlan

Despite much talk of “evidence-based” planning, this is a very political map, and I cannot help remembering then-Premier David Peterson’s announcement of 1990 (not long before he lost an election and Bob Rae wound up as his much-surprised replacement) that amounted to a chicken-in-every-pot map.

There is nothing wrong with network-based planning, and indeed I have been beating a well-worn drum on that subject for years. But let us also remember that the Scarborough Subway exists because of the political clout of Brad Duguid, a former City Councillor, now Ontario’s Minister of Economic Development. Mayor John Tory, in Toronto Life, cites Duguid as saying that “if anyone tries to cancel the [Scarborough] subway, they’ll do it over his dead body”. “Evidence” apparently includes having a large cudgel to keep wandering pols in line.

The map also includes the Mayor’s pet project, SmartTrack, and it’s no wonder that he steers clear of the Minister’s position given the need for a provincial agency, Metrolinx, to accommodate SmartTrack on their network.

All of this is part of the “Motherlode” of public consultation sessions now running in various places around the City, and through Metrolinx in the wider GTHA. Background information and links to related material are available at Toronto’s TransitTO web site.

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TTC Board Meeting January 21, 2016

The TTC Board will meet on January 21, 2016. Unlike most meetings, the public session will begin at 10:00 am, although they may go into camera to discuss details of item 3 on the agenda, the cost overrun on the Spadina subway extension.

Items of note include:

This article has been updated with details on these subjects.

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A Frustrating Update on Transit Expansion Plans

The TTC Board received an update from City and TTC staff on the status of major transit expansion plans in Toronto at its meeting of September 28. The presentation was largely delivered by Deputy City Manager John Livey with backup from Mitch Stambler, TTC’s Head of Service Planning. Also at the table, but notable for her silence, was the Toronto’s Chief Planner Jennifer Keesmaat. A contingent from Metrolinx, another agency studying transit expansion, was in the public gallery, but they did not participate in the presentation or discussion.

This session was a prologue for a report coming to Toronto’s Executive Committee on October 20, 2015, but a great deal of detail remains to be fleshed out. This proved frustrating for the Board members on two counts. First, the lack of detail prevented the TTC from making informed comment on the plans, and second, the process itself has largely bypassed the TTC Board and concentrated work at the City and Metrolinx.

To some extent, the TTC has itself to blame for this situation. During the Ford/Stintz era, meaningful policy debates at the TTC were rare, and the TTC ceded responsibility for large scale planning to the City of Toronto under Keesmaat’s department. At the political level, staying informed about issues is a comparatively new desire by Board members (not to mention some members of City Council) when the issues are more complex than a dumbed-down subways-subways-subways mantra. They have a lot of catching up to do.

Detailed reports on four major projects will come before the TTC and Council over coming months, and these will inundate members with not only a great deal of information but force some hard decisions about just which projects, and at what scale, the City should pursue. These are:

  • The Relief Line
  • The Scarborough Subway Extension
  • Waterfront transit
  • GO/RER, SmartTrack and TTC service integration

ExpansionPlanMap_6

The situation is complicated by parallel work at Metrolinx, an agency with very different goals from the TTC and the City, and by the inevitable political wrangling over the relative importance of projects. Whether any reports coming forward from staff will be trusted, especially in an environment where Councillors and the Mayor routinely dismiss “expert” advice that does not suit their biases, remains to be seen. Equally difficult will be the question of whether the reports are spun, in advance, to suit specific outcomes rather than presenting “just the facts”.

One difficulty already lurking in the wings is the question of demand modelling. The University of Toronto together with City Planning is developing a new model for GTHA travel. This is much more ambitious than current models in that it covers the entire region and models travel over the entire day, rather than focussing on AM peak flows. The model also allows for route and mode choice by incorporating considerations of fares and line capacity (crowding). At this point, the model is still being calibrated and validated, a process that uses known historical data (from the 2011 Transportation Tomorrow Survey) to confirm whether the model generates flows that accurately mimic what actually happened. (The TTS is conducted every five years by UofT on behalf of municipal and provincial agencies, and the next set of data will reflect demands in 2016.)

Draft results for the new projects and network will not be available until October 2015, and a report on details will not come to Council until the first quarter of 2016. One suspicion is inevitable given this delay: is the “calibration” intended to produce a desired outcome? That’s a tricky question both because it speaks to the independence of the process and also to the way in which the model is used. For example, a model may well reproduce past behaviour perfectly, but that’s a known target and the context for it (then-existing transit, road and land use configurations) are a matter of record.

Future modelling depends not only on the nuts and bolts of the model itself, but of the assumptions put into its configuration. A well-known example of flawed modelling was for the Sheppard Subway in which unduly rosy assumptions about job numbers and locations gave the subway a projected demand well above what it actually achieved. The further one goes into the future, the cloudier the view becomes, and the presumed distribution of population and employment can involve political as well as basic economic dimensions. If, for example, the concentration of jobs in the core area and the polarization of high and low income housing concentrations continues, this has profound effects on future demand. Moreover, such concentration may not suit politicians who view their own turf as the rightful place for future growth.

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How Much Will The Spadina Extension Cost? (III) (Update 3)

Updated April 13, 2015:

The TTC has issued a press release regarding the management of the Spadina subway extension project:

The Toronto Transit Commission has entered into an agreement with Bechtel Canada Co. for project management of the Toronto-York Spadina Subway Extension (TYSSE) for up to $80 million.

The contract value to Bechtel is based on staffing costs, management fees and incentives to open the subway extension by Dec. 31, 2017. Bechtel staff begin work today and will form an integrated team with existing TTC personnel. The Bechtel contract will expire March 31, 2018. Bechtel’s project director will report directly to TTC CEO Andy Byford.

On March 26, the TTC board approved a report from staff that recommended TTC enter into a sole source agreement with a project manager with a proven track record of delivering similar-sized projects on time, and with experience working with multiple contractors, in order to have the TYSSE in service by Dec. 31, 2017.

Toronto City Council subsequently authorized the expenditure of $90 million, while the Regional Municipality of York authorized the expenditure of $60 million, for a total of $150 million (third party contractor, plus in-house project costs), to fully deliver TYSSE by the end of 2017.

The release is silent on the issue of what might be done with the remaining $70m of Toronto/York’s $160m authorization.

Original article of March 29, 2015:

In a previous article, I reviewed information from a media briefing by Andy Byford on the status of the Toronto York Spadina Subway Extension (TYSSE) project. At the TTC Board meeting on March 26, 2015, further information was made public both in Byford’s presentation, and in additional material appended to his report.

Updated March 30, 2015 at 1:30 pm: The slides from Byford’s presentation are now available starting at page 58 of the linked pdf.

Updated March 30, 2015 at 11:30 pm: A new report from the Toronto City Manager to Council advises that the interest earnings on the “Move Ontario Trust” (the repository for provincial contributions to the TYSSE project) have not achieved the target rate of 4% resulting in an $85m shortfall. Oliver Moore reports in the Globe that Ontario has refused to make up this amount as per the original agreement between the funding partners. Toronto and York Region are on the hook for this additional cost estimated at $51m for Toronto and $34m for York Region. This expense is over and above the cost overruns on various contracts, but at least Council cannot blame the TTC because the trust fund is not under TTC control.

Appendix F (beginning at page 33 of the linked PDF), is a presentation given to the Executive Task Force who oversee the project on behalf of the sponsoring governments on July 28, 2014. The presentation was given by Parsons Brinkerhoff who had been retained by the TTC to review the project.

Appendix G (beginning at page 56) is a two-page summary of Bechtel’s work reviewing PB’s original study and a subsequent APTA (American Public Transit Association) peer review. APTA concluded that an earlier completion date would be possible than PB had projected, but only with major changes to the project management structure. Bechtel concurred in these findings.

It is abundantly clear from this material that the TYSSE’s problems were known at the top level of the project in mid-2014 at the latest. At the time, their severity was so great that the project would still be incomplete by the time of the next municipal and provincial election cycles, and that considerable additional cost could be facing the funding partners. This very serious issue did not arise in public discussion until six months later, notably after Toronto’s 2015 budget cycle was complete.

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How Much Will The Spadina Extension Cost (II)?

In a previous article, I reviewed the history of the Toronto York Spadina Subway Extension (TYSSE). This project has been widely reported to be both late and over budget, but details only began to emerge on March 20, 2015 when TTC CEO Andy Byford fired two senior members of the engineering staff.

On March 21, 2015, Byford presented a briefing to the media as a preview of a report to be discussed by the TTC Board on March 26, 2015. This report includes both current information on the project and an October 2012 update that was issued when the TYSSE deadline was shifted to fall 2016.

The key points of the briefing were:

  • The earliest possible opening date for the TYSSE to Vaughan is the end of 2017.
  • Relations between TTC project management and the various contractors working on the TYSSE are badly strained, and this cannot be remedied by those now in charge.
  • Byford recommends that the TTC “retain a third party project-management firm as an incentivized project manager” (the terms of the proposed arrangement are confidential pending execution of the agreement).
  • Alternate schemes for continuing the TYSSE project with TTC staff in part or all of this role will extend the period needed to resolve outstanding issues and reach project completion, and will increase total project costs.
  • Additional funding to keep the project active to the end of 2017 of $150-million is required with Toronto paying $90m and York Region paying $60m. Toronto’s share could come from a TTC operating surplus in 2015 (mistakenly cited as “2014” in the report), property sales and/or deferral of projects. There is no word on how York Region might fund its share of the extra costs.
  • The project is subject to many claims by contractors against the TTC, and some counterclaims on the TTC’s part. The eventual value of settling these is unknown, and this is a potential additional cost beyond the $150m. Whether this can be accommodated by the existing project budget remains to be seen.

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How Much Will The Spadina Subway Extension Cost?

The Toronto York Spadina Subway Extension (TYSSE) to Vaughan has been much in the news lately thanks to its delayed opening and cost overruns. The line was originally expected to open in 2015, even in early rosy estimates before the Pan Am Games, but now will not be in service until 2017. The project was repeatedly cited (as recently as December 2014’s CEO Report) to be on its budget of approximately $2.6-billion. The exact final cost is not known but has been reported to be up to $400-million more.

To date, the TYSSE project is on budget with a total budget of $2,634 Million. The in-service date is targeted for the fall of 2016 however the project is facing a serious schedule challenge. [CEO’s Report for November-December 2014, p. 29]

The “on budget” statement, which had appeared in all previous CEO reports, vanished with the January 2015 report.

A peer review was conducted by an APTA panel in late 2014 largely to assess schedule and budget challenges. A report is expected at the end of January related to schedule and budget challenges and will make recommendations to mitigate these challenges.

Bechtel Ltd., a consulting firm, was also retained at the CEO’s specific direction to conduct a thorough in depth analysis of the project and likewise is expected to present its findings at the end of January. [CEO’s Report for January 2015, p. 30]

The results of these reviews are to be tabled at the March 26, 2015 TTC Board meeting.

There are two issues in play here. First and most obvious is the question of how a major project can suddenly be found to have budget problems, and why these were not discovered and reported sooner. How much oversight did the TTC Board actually have beyond the one-line monthly assurance that the project was “on budget”? Second is the more general question of the tracking of major projects, and why this is not regularly reported to the Board and through them to City Council and other funding governments.

To learn as much as I could from publicly available sources, I culled through TTC meeting reports going back to the early days of design work on the TYSSE. Tracking a project’s history this way can be challenging for various reasons:

  • Some agendas exist only as a PDF file without links to the underlying reports.
  • TTC procurement policy allows contracts of up to $5-million to be approved by management without a report to the TTC Board. (This is in line with the City of Toronto’s policy.)
  • A monthly report listing all expenditures authorized by management in the $1-5m range was discontinued in March 2012.
  • Changes in the total authorized spending on a line item only appear in public when there is an update involving a large contract change.
  • The CEO’s report tracks variations in capital spending, but this is only against the expected amount for the current year, not for a project overall. Because of various delays, the TYSSE tended to underspend versus plans even though the estimated total cost to completion might actually be rising.

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TTC 2015-2024 Capital Budget: System Expansion Projects

The TTC’s Capital Budget generates much debate over a few items, but there are many, many projects at the detailed level. Understanding those details puts the debate over transit spending, operations and expansion in a better context. This and following articles will look under the covers of the Capital Budget. I will start with the expansion projects because these have seen so much debate, but will turn to the more mundane parts of the budget that keep the wheels turning.

The projects discussed here include:

  • The Toronto York Spadina Subway Extension (TYSSE) to Vaughan Metropolitan Centre
  • The Scarborough Subway Extension (SSE)
  • Various Waterfront proposals

Neither the Downtown Relief Line (DRL) nor the Yonge extension north to Richmond Hill is included because these are not yet official projects.

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TTC Board Meeting: July 23, 2014 (Updated)

The TTC board met on July 23 with some items of modest interest on the agenda. This is the second last meeting of the current board before the October municipal election sweeps away at least some of the current crew. Nothing of real substance will happen until the new Council takes office, and a new Mayor attempts to forge an agenda for transit that is more than a simplistic, pandering slogan.

Included in the agenda are:

  • The monthly CEO’s report;
  • A purchase amendment regarding the new TR trainsets to retrofit additional handholds and to provide speakers outside of cars so that riders can hear door closing announcements;
  • The Transit Project Assessment (TPA) for McNicoll Garage (a proposal already contested by the neighbourhood where it will be built);
  • The proposed sale of the Tunnel Boring Machines (TBMs) used for the Spadina Subway Extension;
  • A proposal from Commissioner Heisey that the City of Toronto seek a change in TTC and Metrolinx governance so that one member would be cross-appointed between each board; and
  • A request from newly minted Commissioner Pasternak for a report on his pet project, the Sheppard Subway extension west to Downsview.

Update: An additional item came in via correspondence: a request for an express bus route from Liberty Village to downtown.

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