Finance

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Metrolinx: Too Many Fingers in the Pie (2)

The Metrolinx Board met on September 26, and I am pleased to report that Board members bit hard into a proposal to establish a complex process for project approval and procurement.  (See “Project Management and Delivery” in this report.)

Chair Roger Anderson (Durham Region), already in a feisty mood over omissions in the Draft Regional Transportation Plan, led off by noting that a major policy decision was buried in an “Information Report”, the CEO’s monthly status update.  He discovered this scheme when he read his meeting agenda at 1am, and clearly he was not amused.  Even more clearly, this whole idea had not been discussed at all by the Board even in private session.

Anderson moved to defer the item to a future meeting, and this triggered concerns by Rob MacIsaac, chairing the meeting.  Watching him in action, it’s obvious that he doesn’t like to lose votes, but as the debate went on, it was clear that Anderson was not alone, and MacIsaac wisely got out in front of his troops to lead them where they were already headed.

A common thread in remarks by Anderson, Mayor David Miller (Toronto) and Mayor Hazel McCallion (Mississauga), among others, was whether Metrolinx exists to work with the municipalities as a regional agency, or as a provincial overseer interfering with and dictating to local bodies.  Anderson noted that municipalities have the staff to design, manage and deliver projects, and that they should not have to fight Metrolinx to get things done.

Michael Fenn, Metrolinx CEO and author of the report, replied that Queen’s Park, through the Ministry of Transportation, has a role in project evaluation.  If so, I must ask whether Metrolinx is simply providing cover for MTO interference, and what role, exactly, is expected of a Board composed of leaders of the very municipalities that originate most of the transportation plans.

Continue reading →

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Metrolinx: Too Many Fingers In The Pie

With all the attention on the Draft Regional Plan, another proposal lurks unnoticed in the agenda for Friday’s Metrolinx Board Meeting.

The agenda itself gives no indication, and the report of interest is called “CEO Report”, an innocuous title.  However, within that report we find a detailed description of the “Metrolinx Project Delivery Process” which the Board is asked to endorse.

First as a matter of process, substantive policy decisions should not be embedded in reports whose title implies a status update, unless the real desire is to hope that nobody will notice.  Second, the proposed process shows that Queen’s Park has no intention of letting Metrolinx operate as a truly independent regional authority, but instead will hold it very tightly under control by various Ministries.

Many have spoken as if Metrolinx would someday become the overarching authority for GTA transit planning, construction and operations.  Not true.  Even the proposed amalgamation of GO Transit with Metrolinx is sitting as unproclaimed sections of the GTTA Act, and my guess is that GO will fight every step of the way against being taken over by an agency that has never run a single transit vehicle.

Continue reading →

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Is There an Optimal Supply and Demand for Transit?

On September 16, the Canadian Urban Transit Association (CUTA) released a study on the optimal supply and demand for transit in Canada.  Although I may have slept through the local press coverage, I don’t think that there was much if any as other issues crowded out the story.  One might ask why I’m bothering with it now, but I think this is worth talking about even though I don’t agree with the premise of the report.

Only the Executive Summary and Backgrounders are available on the CUTA website, and as a courtesy for copyright, I will not post the full version here.  You will have to get it from CUTA if you really want it.

The principal conclusions as highlighted on the CUTA site are:

  • The economically and socially optimal level of transit supply in 2006 would have required an estimated 1.7 billion vehicle-kilometres of transit service, or 74 percent more service than actually supplied.
  • In 2006, capital investment of $78.1 billion would have been required to bring the supply of transit into line with the optimal conditions of supply in that year.
  • Results of the analysis conclude that Canada is clearly underinvested in urban transit.
  • Bringing transit to the optimal level of supply would produce several positive economic and social benefits – more than two thirds of these benefits constitute the economic value of reduced roadway congestion.

There is no question that higher investment in transit is required across Canada.  However, there is a danger with any calculated “optimal” value that this will be taken as an upper bound.  Moreover, the methodology of the study does not address future needs, only the situation that existed in 2006.  It is based on average relationships between several economic variables taken on a national basis that almost certainly misstate the micro-level effects in urban areas. Continue reading →

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TTC 2009 Operating Budget

This week, the TTC presented a 2009 Operating Budget in a style departing from past practice.  Instead of weeping and wailing about how they would love to run better service, but can’t afford it, the TTC now has a budget posture of “this is what we plan to run, now let’s find the money to do it”.

This is the sort of advocacy long missing from a “transit” agency.

The starting point for the budget assumes:

  • Costs will rise due to inflationary and contract pressures, as well as operation of more service.
  • Revenues will rise due to increased riding (with no allowance for a fare increase).
  • The City of Toronto subsidy will remain unchanged (this is actually a decline taking inflation into account)
  • The outstanding difference is to be funded through whatever revenue streams become available including a carry-over of any surplus from 2008 (at last report, a deficit, not a surplus was forecast).

Riding at current levels was last seen almost two decades ago in 1990, just before a recession triggered job losses, funding and service cutbacks.  During the dark years, service improvements were hard to achieve because almost no changes could meet the high average cost recovery of the existing system.  Policy shifts in this decade have moved the TTC to actively seek new riders even if this means that average will fall from its high of 85% back to a range in line with historic practice of the 80s and before. Continue reading →

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TTC Hosts Presentation on Montréal’s Smart Card Experience (Updated)

On the evening of Thursday, September 18, there was a presentation by Montréal’s AMT on the implementation of their Smart Card system.

See the announcement flyer for more details.

Updated:  The presentations gave a lot of information about the Montréal OPUS project, and I will outline the high points here.

Joël Gauthier, President and CEO of the Agence métropolitaine de transport was the main speaker.  He began by talking about the transit renaissance in Montréal.  Ridership has grown consistently since 1995, and the introduction of new fare systems supports the growth and attractiveness of public transit in general.  Capital programs are also underway to expand transit services including a new commuter rail line and an LRT line.  System ridership in 2008 is up 8% over 2007.

The Montréal region contains 83 municipalities (plus an additional 8 within the AMT’s service territory) and 14 transit operators serving a population of 3.6 million.  There are 2,550 buses, 5 commuter rail lines (52 stations) and 4 subway lines (68 stations).

An important thread in M. Gauthier’s talk was a focus on consumers.  The transit system needs a good relationship with its customers through service quality and through offerings such as OPUS that simplify the travel experience.  Smart Cards are part of an overall solution, not a cure-all.  Indeed, the OPUS project includes the construction of twelve customer centres around the Montréal area that will provide general support for the public in addition to OPUS itself.

The old fare structure in Montréal was fragmented among the 14 separate agencies each with its own fares, media and discount structures.  Riders would have to purchase single fares (tickets, tokens, passes) for each system they used, much as we see today in the GTA. 

Fare rationalization was introduced in 1996, five years before the OPUS project even started, to simplify fares for riders.  The metropolitan area is divided into 8 zones although most riders lie within a few of them.  A pass covering multiple zones is 15-25% cheaper than the combined cost of passes in the old, local systems.

Riders within the downtown zone are split about 50-50 between single ticket and monthly pass users, while those who cross zones are split 90-10 in favour of passes because of the discount.  The fares apply to all services including commuter rail.

Although revenue under the new scheme is lower, this is subsidized by funds from the provincial gas and vehicle license taxes.  Note that this is an organizational and governance issue, not a technology issue.  The desire to lower cross-zone fares is a noble goal, but it has a cost.  Smart Cards allow for flexibility of implementation of new fare schemes and for more accurate tracking of usage on each system, but they don’t magically create new revenue.  The expected savings from reduced fare fraud are seen as an offset to the system’s capital and operating costs, not as funding for fare rationalization which was already in place for a decade. Continue reading →

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TTC 2009-2013 Capital Program (Part 2)

In this section, we will see the complete mess that Toronto’s transit funding is in.  Years of putting off a proper funding arrangement coupled with a naïve hope that Ottawa will fund 1/3 of capital projects leaves us with a huge menu of projects and expectations, but no money to pay for them.

As before, the material is the TTC’s presentation, reformatted to simplify it in this medium, with my comments appearing in italics.

Continue reading →

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TTC 2009-2013 Capital Program (Part 1)

The TTC presented its Capital Budget at last Wednesday’s Commission Meeting, and included a few surprises.  Before I go into the details, a few general observations:

  • Through judicious project deferals, the TTC has managed to keep its annual funding request down to a level within the City’s spending target, but this is getting harder and harder to sustain.  There is only so much work we can push off into future years and it’s all starting to pile up.
  • The budget assumes a considerable contribution from other levels of government who may not be predisposed to meeting the TTC’s request.
  • The scale of the TTC’s budget is quite large and its impact on the need for Provincial funding is substantial over and above whatever might be done under the MoveOntario2020 program.
  • Detailed costs for projects are shown over a five-year span, but many of these extend well beyond 2013.

In the material that follows, I have converted some of the presentation to plain text and left other parts as scanned images to keep the total size down.  My own comments are interspersed with the TTC presentation and they are in italics.

Continue reading →

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Service Changes for September 2008

Fall 2008 brings service back to its standard levels on the TTC network after some summer cutbacks.  I have consolidated the service changes, most due to increased riding, in a two-page summary.

I have omitted a lot of information on school trips and other seasonal changes, but if you want the gory details, you can either visit the TTC’s website or read the summary on Transit Toronto.

A few notable points in this round:

  • Off-peak service on the Yonge and Bloor subway lines is increasing to meet rising demand.  Even with the added service, the lines will be only slightly below the service standards threshold at which more trains have to be added.  The off-peak standard is 500 passengers per train, or 83 per car (a small number of standees at the peak point).
  • For everyone who dreads off-peak visits to the Distillery District, the Cherry Street Union Station service will now run every 15 minutes on Saturdays, and every 30 minutes in the evening.  This is far from spectacular, but it’s an improvement for those who prefer not to walk to the King car.
  • Better service comes to the Harbourfront car recognizing that people on the waterfront actually exist, and they stay up late.  The Spadina car will now run to Union Station until the subway closes.
  • Service improvements on Eglinton West, Jane and Morningside address growing demand in these corridors (all of which happen to be part of Transit City).

Further improvements are expected later this fall including the next round of the Ridership Growth Strategy with full service on all routes during subway operating hours.  Coming in 2009, budget permitting, is a move to 20 minute maximum headways.

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No Pearl in the Oyster?

Today, Transport for London announced that they would be terminating their support contract for the Oyster fare card at the 10-year opt-out anniversary:

Transport for London to terminate £100m a year Oyster contract.

The Mayor and Transport for London (TfL) are convinced that any new contract will deliver enhanced services for less money, driving significant savings.

The Mayor is keen to improve the Oyster card to make it even more attractive for Londoners and TfL will work to make sure this happens both quickly and in a way that represents the best value.

Shashi Verma, TfL’s Director of Fares and Ticketing said: ‘Transport for London is committed to delivering value for money across all of its services.

‘As part of this we are looking at more cost effective ways to manage and develop the Oyster card system that we expect will save millions over the next few years.

‘The savings will be reinvested to deliver further improvements in London’s transport system.’

Full news release

BBC coverage

TfL took pains to emphasize that they think the Oyster card is a great thing, but that the cost of providing the service can be reduced from the £100-million annual cost to a consortium of private contractors.  Issues have already surfaced about ownership of the “Oyster” brand and other components of the system.

Meanwhile, Torontonians continue to hear about the wonders of Presto as the salvation of regional travel.  I must emphasize that I don’t object to technology per se, but in London’s case there was an overwhelming need to replace an antiquated and complex fare structure and fare collection system.  Toronto does not face the same level of complexity.

An odd thing seems to grip advocates for technologies in various guises:  all of that private sector, value for money, keep an eye on the taxpayer’s dollar stuff flies out the window the moment someone wants to sell a system.  Metrolinx and Queen’s Park seem to be big on “alternate financing”, a scheme by which we keep the cost of infrastructure off of the public books by having a private company own and operate it under a long-term service agreement. 

Will they turn the same eagle eye on Presto, or will we simply be dragged into the new system without understanding its true cost?  The last time I heard, the cost to implement just for the TTC was approaching $250-million, plus annual costs to operate the system of at least $10-million greater than the current elderly but simple token and pass scheme.

Will there be a option to get out of the Presto contract at, say, a 10-year anniversary as there is in London?  Will the contract be written to ensure that the infrastructure, the trademark and any valuable side-agreements such as the use of a fare card as an electronic wallet stay in the public realm?  Will we just give away the store like Highway 407 to the salesman with the best song-and-dance who offers a quick solution, don’t fret about the details?

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How Much Will It Cost To MoveOntario? (Updated)

Updated July 8:  Metrolinx has announced that the draft Regional Transportation Plan and Investment Strategy have been delayed until September.  You can read about this in The Star and in the official Metrolinx press release.

[The original post follows below.]

Those of you who have been following the proposals and plans from Metrolinx will know that there’s been a tiny bit of inflation in the projected cost of transit improvements for the GTAH.

About one year ago, Premier McGuinty announced MoveOntario2020, a plan to invest $17.5-billion (2/3 from Queen’s Park, the rest from Ottawa) in over 50 projects for the region.  For the moment, leave aside the fact that this was less of a plan than a grab bag of every proposal that was sitting on the table in every municipality.  At least it was a starting point to talk about investment in transit.

One big chunk of MoveOntario2020 is Transit City, and it accounted for about 1/3 of the total.

Many hurrahs!  Horns blared!  Gongs clanged!  Visions of a transit future danced through our heads.

Over the past year, the picture has changed quite a bit.  The most aggressive of Metrolinx plans, as described in their Preliminary Directions White Paper, requires an annual outlay of $3.8-billion for capital and another $3.8-billion for additional operating costs.  (Table E-1, page 63)  The least aggressive isn’t far behind.

That’s a huge jump from the investment that would take us out to 2020, and sticker shock may derail the whole thing.  It wouldn’t be the first time. Continue reading →