Finance

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Where Ottawa’s Stimulus Spending Is Going

In my articles about the TTC budgets, I have been remiss in not reporting on the effect of the Federal Infrastructure Stimulus Program.  The TTC had a presentation on this topic at its meeting in September as part of the Capital Budget report, but I never wrote up the information.  (The presentation is not available online.)

I have summarized the financial information for easier access.

Stimulus Funding Summary 2009 to 2011

This summary contains two sections corresponding to two parts of the presentation.  One is for Operations and one for Construction.  There was more financial breakdown in the Operations section, and I am not going to try to explain why.

The TTC (and City) budget years correspond to the calendar years, while the Federal Government fiscal year starts on April 1.  That’s why all of the stimulus work to be billed to Ottawa must be completed by March 31, 2011 — nothing can spill over into the 2011-12 budget year.  (As an aside, I might note that both Queen’s Park and Ottawa happily include this non-recurring spending when they talk about the deficit as if it will go on forever.  This makes the deficits look bigger than they really are in the long term, and magically they will fall for the 2011 budget year when the stimulus ends.)

For the Operations projects, the budget is broken down into each TTC fiscal year showing the original and revised spending level for each project line (these correspond to lines in the full TTC Budget).  Of particular note is the fact that the change, if any, varies in each year and in some cases the change in 2011 is quite large.  This indicates work that was brought forward into 2011 from future years, but which won’t be completed by March 31 and is therefore only partly eligible for stimulus funds.

The three-year total for Operations is $68.1-million, up by $25.1m over the original plans.  Of this, Ottawa will contribute $10.8m or about 43% of the increase.

For the Construction projects, only the three-year numbers are given, and in each case Ottawa is assumed to pay 1/3.  Note that the Warden Station project, included in the list, was subsequently cut as part of the City’s budget review and, therefore, Ottawa’s $4m share has been foregone.

Looking at the Grand Total, Ottawa will contribute $61.1-million, about 28%, to projects with a total value of $219.0m.  The remainder will come from the City and Queen’s Park.

This is only part of the total stimulus package coming to Toronto as most projects are in the City’s own budget, not the TTC’s.

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When Things Go Wrong (1) (Updated)

CBC Radio 1 will be looking at the issue of TTC customer service starting on Monday, January 11, and I will be on Metro Morning dark and early sometime before 6 am.

Updated January 11:  The Metro Morning interview is now available online.

The chats with story producers got me thinking about the TTC’s eAlert system as well as other sources of information.  Knowing we won’t possibly cover all the details in a short interview, and that other aspects of the discussion will certainly come from readers here, I have started this thread.

A long-standing complaint about TTC service is that nobody knows what is going on.  At the best of times, one might peer into the mists on Queen Street and hope that somewhere there is a streetcar, or listen down the subway tunnels for the familiar rumble of a train.  Far too often, the TTC is not at its best, and the lack of information can drive people into a fury, one that may be visited on hapless TTC staff who are no better off than the rest of us.

The TTC’s website can be hit-or-miss depending on whether it is being updated regularly.  For example, the 501 Queen car’s route description was not changed back from the Shaw/Parliament split until quite recently (thanks to feedback from a reader on this site).  However, the 512 St. Clair route description gives no hint of the split streetcar/bus operation.

Diversions pose a special challenge because some are implemented thanks to emergencies such as fires or major collisions, but the most annoying are those implemented locally by the route management team, and not reflected on the website or on notices at bus and car stops.  The 41 Keele (local) service is diverting around construction at St. Clair southbound, but it took a few weeks for this to show up online, but only in the route description.  The schedule page and map still show the route running via St. Clair, and you can look up times for a stop that in fact has no service.  The info is on the “Diversions” page, but there is no alert on the route’s own page to indicate that readers should also consult the diversion information.

The subway, the main target of this article, has additional information sources for would-be riders, although all of these can be quite frustrating.

If you are at platform level, and your station has a working video screen (dead screens are becoming common), and you’re standing close enough to read it, and Transit Control considers a delay to be serious enough to put up a notice, then you have a fighting chance of discovering that something is amiss.  There may even be PA announcements, but they tend to occur only for very long-running delays.  (As I write this, there is no subway service east of Victoria Park, and info about this comes over the speaker systems regularly.  It also appears on the “Service Advisories” on the TTC website.)

If you are anywhere else, and you have cell/internet signal, you may get information from various sources:

I get both the eAlerts and the Facebook updates, and compiled a log of information from both sources.  My apologies to those who don’t like “busy” displays as there is a lot of info consolidated in one place. Continue reading →

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Service Changes for January 2010

A few changes will occur on Sunday, January 3, 2010.

Notable among these is the 192 Airport Rocket which has been formally rescheduled and rerouted in response to concerns about the safety of its operation.  The changes were implemented on November 2, 2009. 

The northbound route is via Dundas, Hwy 427, Hwy 27 and Dixon Road to the airport.  Southbound trips remain via Hwy 427 and Dundas to Kipling Station.

The loading standard at all times is 38, a seated load.

2010.01.03 Service Changes

At Scarborough Town Centre, the 169 Huntingwood bus will move to the diagonally opposite corner of the platform from its current location to make more room for the 190 Scarborough Centre Rocket.  This takes effect on Tuesday, January 19.

2010.01.19 STC Bus Bays

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Why Is The TTC Budget Up By So Much In 2010? (Updated)

Updated December 25, 2009 at 11:40 pm:  Most of the links from this article were not working because I saved the files under different names than I used in the links.  Sorry about that.  This has been fixed.

In a previous article, I looked at the revenue side of the TTC’s budget where, despite an 11% increase in fares, the total revenue only goes up about 4%. Now I will turn to the expense side of the budget.

The material in this article is abstracted from a presentation (not available online) given by TTC staff at the December 16, 2009, Commission meeting. The overview report is available.

Total expenses will rise from $1.298-billion (probably 2009) to $1.380-billion, or $82-million, a 6.3% increase. This comes from many separate increases, some of which have net new staff attached to them. Unfortunately, the TTC gives the dollar increase for each factor, but does not break out the 2009 numbers for comparison. For example, two areas might both see $3-million increases, but we don’t know how much was spent on each of them in 2009 and so lack a frame of reference. (The reason we cannot simply look at the 2009 budget and financial reports is that the breakdown of the 2010 budget is on a different basis.)

A striking point in a number of these items is the sense that the TTC is making up for reductions in maintenance forces that have compromised the quality and even the safety of the system. Individually these are small, but from past experience, I must ask what other “cost containment” effects have yet to be reported or acknowledged.

Many of the increases this year are, no doubt, justified but the absence of any analysis or review of existing spending offers a target for budget hawks when the TTC seeks a higher subsidy at Council.

The TTC produced an outlook to 2013, but it is almost meaningless because it presumes no ridership growth (462-million rides every year for the next four years), no change in fare structure, and a rise in expenses from $1.380 to $1.629-billion (about 6% per year even with a flatlined operation). This is not credible, and discussion of future transit funding, service and fares must be based on better information than this.

Whether the Commission chose to have “frank discussions” (to use diplomatic language) in private and keep the dirty laundry out of public view, or simply were buffaloed by the material staff presented, I don’t know. Toronto, and transit generally, are ill served by the lack of full and comprehensible information.

Continue reading →

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How To Raise Fares 11% and Make Almost Nothing At All

At the recent TTC meeting, the Operating Budget for 2010 was up for review, not that there were many questions in the public session.  All of the heavy lifting took place, no doubt, in private session and in other discussions leading up to the final version.  (The information in the linked report does not exactly match the material presented at the meeting, and that presentation is not available online.)

I will review the budget and the sources of increased costs for 2010 in a separate article, but the fare increase deserves special mention.  TTC staff have a bad habit of stating almost everything relative to something else, and this makes reference to a zero base tricky.  Money shuffles around rather like a game of Three Card Monte, and only if you’re very good, can you find the lucky card. Continue reading →

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What Should We Do About Fares (3)

Last week, the TTC approved new fares to take effect January 3, 2010.  This scheme represents roughly an 11% increase for adult tokens with proportionate increases in other fares.

Oddly enough, the projected increase in revenue is well under 11% thanks to the estimated loss of riders due to such a big jump in fares.  The idea of a freeze last year may have seemed good at the time (going into a recession), but the consequences of having two years’ worth of increase at one time is the downside.

The Commission overrode staff’s recommended fare scheme and held the Metropass multiple at the same level as in 2009 so that it would rise to $121 rather than $126 (to $111 instead of $116 for subscribers).  In a major new policy, the Commission, reacting to a large and well co-ordinated campaign, removed the age limit for student passes and extended them to post-secondary students effective September 2010.  This will save them $22 off of a regular Metropass.

The Commission also agreed to pursue a target of 60% farebox recovery to bring Toronto’s system to a level closer to other Canadian systems.  What remains to be decided is how that 60% level would be achieved.

Fare policy should never be made in the heat of a budget debate, but nobody seems to want to discuss the issues at any other time.  This brings gains, if any, to the squeakiest wheels, not necessarily the most deserving.

I expect all sorts of ill-will to come my way for saying this, but we hear a lot about the effect of transit fares on “the poor”, whoever they may be today.  Are students “poor”?  In past fare debates, they have been painted by advocates for welfare recipients and the working poor as coddled members of a class who could look forward to substantial incomes.  Yes, some students come from backgrounds of limited means, but does this entitle them to fare discounts?

The poor, those for whom budgeting consists of day-to-day decisions about what they can spend, choose not to buy passes because this would represent a single large outlay and because they are unsure of actually needing a pass for the entire month.  The sad fact is that “the poor” tend to pay single fares, or at best token fares, because that’s what their cash flow permits.

Taking the farebox recovery to 60% is presumed by many to mean “freeze the fares”, but that’s both shortsighted and not necessarily the best policy.  The TTC budget for 2009 was roughly $1.3-billion, and a 10% reduction in fare recoveries represents $130-million of new “expense”.

  • The reduction might be achieved by running more service, changing the standards so that buses and streetcars ran more frequently with more empty space (even seats!).
  • It might be achieved by changing the fare structure.
    • The TTC has already priced the implementation of a time-limited fare (unlimited riding for one fare for two hours) at about $15-million annually.
    • Over a decade ago, the cost of senior/student fares relative to adults was bumped in a revenue grab to stave off a larger adult fare increase.  Should this be reversed?  All in one go, or over a few years?  How much would it cost?
  • As a fare freeze, that might last two years, after which we would be back into a debate about a fare increase at least at the level of inflation.

Better service benefits everyone not just by making the system attractive and improving its political base (without which better subsidies are unlikely), but also by reducing the time wasted by riders trying to get from “A” to “B”.  The time spent waiting for a bus or streetcar to show up can be a significant part of someone’s trip, and unreliability further extends the period a rider must allow for the “routine” delays that may occur. 

Time-limited fares would simplify the entire transfer mechanism (establishing a clear yes/no test for transfer validity), but would also act as a limited-time pass giving people who must make a number of linked, short trips the ability to travel without paying many fares.  (Yes, there are day passes, but they’re not always available when and where you need them, and four fares may be more than you want to pay.)

Adjusting the ratio of senior/student fares to adults would improve the lot, financially, of a group that were treated in the past as cash cows, a captive market that would bear any increase.  There will always be fare increases eventually, but there is also a strong argument for restoring the ratio between adult and the concession fares to historic levels.

Smart cards are mentioned often, but the system should allow someone to qualify for bulk discounts (equivalent to passes) based on their usage history without having to pay for an entire week or month of transit use up front.

If the intention of that 60% target is simply to freeze fares, that’s nothing more than a call for greater subsidies without the riders putting any money into the pot, and it will do nothing to change the quality of transit (or the fare structure).  Two years from now, we will be back in exactly the same place.

If the intention is to have a full debate about how we might adjust fares and service, then that’s worthwhile.  We can talk about investing in transit, in making the system more equitable, in improving service and reliability.  Those are changes where new subsidies provide lasting results for riders, not bandaids to defer real discussion until the next budget crisis.

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Metrolinx “Big 5” Update (November 2009)

Today’s Metrolinx Board Meeting was notable both for the update, in public session, of the project status for five major lines as well as for supplementary information that came out in a press scrum after the public session.

Five projects now have funding and are at various stages in their approval/construction process.

Continue reading →

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What Should We Do About Fares?

In my previous article, I reviewed the TTC staff report about the proposed fare increase, but didn’t say much (except in the comment thread) about my overall view on the situation.

The most important fact about Tuesday’s TTC decision, whatever it will be, is that it will not set, once and for all, either the fare and service levels for 2010, nor general fare policy for the future.  Any attempt to do so runs directly into the limitations of the TTC’s mandate and the simple truth that neither the City nor Queen’s Park have clearly stated how much the TTC might get in operating subsidies for 2010.

For next Tuesday, as I have said many times, I support the proposed 25-cent token fare increase with all other fares rising proportionately.  The attempt to grab $5 extra a month from Metropass holders is an unfair, precipitous action brought forward by TTC staff who have always fought against making the pass “the better way” to travel.  That the scheme was announced by a press release rather than by a formal proposal from the Commission itself raises serious questions about who is setting policy at the TTC.

If the Commission adopts this fare scheme, the TTC will still be about $50-million in the hole going into the 2010 budget process.  At this point we have no idea what sort of tradeoffs this might entail, and the Commission is asked to implement a fare change without all the facts on the table.

As I mentioned in my previous article, TTC staff claim that the system’s costs will rise by 7% per annum for the foreseeable future, but they do not quantify the source of this magnitude of change.  Some factors listed in the staff report are non-recurring or have a limited effect on future budgets.

Next Tuesday, as we always see when fare increases are on the table, there will be many groups calling for various changes in fare structures ranging from a complete freeze to new discounts for certain groups of riders.  I believe that the Commission, and by extension the City, should not be making fare policy on the fly.  We are all badly served by “debate” that is inevitably presented as a decision that must be taken today lest the sky fall tomorrow. Continue reading →

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TTC Budget Report: Raise the Fares

The TTC staff report recommending a fare increase is now available on the TTC’s website.  This will be formally considered at the Commission meeting on November 17, but of course this subject has already been discussed at length in the media and on blogs.

The new price for adult tokens will be $2.50, up 25 cents, with all other fares increased roughly pro-rata.  The one exception is the Metropass for which the proposed fare multiple (the ratio between the pass price and the token price) would be bumped by the equivalent of two fares.  This places the burden of the fare increase disproportionately on the Metropass users.

The TTC projects essentially flat ridership and service for 2010 relative to 2009.  Projected riding is 473-million, up only 2-million over the likely 2009 level.  Other than the full-year effect of service changes added during 2009, no major service improvements are planned for 2010.

A particularly striking comment in the report is that TTC costs are expected to rise next year by 7% and to continue rising at that rate for the foreseeable future.  A number of factors are cited, but they don’t all make sense over an extended period.

  • Labour costs.  The TTC is committed to wage increases at the currently contracted levels, but unless there is a major change in economic circumstances, the next round of bargaining will almost certainly result in a lower rate of increase.
  • Energy costs.  It is unclear whether all of the TTC’s energy costs (diesel fuel, electric power) will rise at greater than the rate of inflation and if so, by how much.
  • General inflation.  Since labour and energy are already out of the mix, this only affects costs such as materials.
  • Annualized service increases.  This affects only 2009.
  • Low floor bus adjustments.  By the end of 2009, high-floor buses are planned to be less than 10% of the bus fleet, and by 2013, last of them will be retired.  The capacity adjustment for changing to low-floor buses will be completely worked into the system substantially in 2010 when 58 of the remaining 100 “New Look”s are retired.
  • Construction and congestion adjustments.  Some additional construction effects can be expected as programs such as watermain replacement ramp up, but this will hit a new plateau at some point.
  • Increased vehicle and facility maintenance requirements.  I can understand better facility maintenance (although stations are covered in a separate bullet), but if anything the vehicle maintenance costs should start to drop with the implementation of large new fleets of vehicles in all modes.

If we are looking at a sustained 7% growth in the TTC’s operating budget, even without service improvements, the underlying reasons must be clearly understood.  This has very serious implications for transit funding, service and fares in the coming decade. Continue reading →