Finance

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The King Street Pilot: Sorting Fact From Fiction (Part IV: Headway Reliability)

The King Street Pilot has been a success in reducing travel times for streetcars through the core area with knock-on benefits to the outer parts of the route in reduced short turns and more reliable service especially outside of the peak period.

Headway (the space between vehicles measured in time, not distance) is a big issue for riders, and it also affects crowding levels.

If a service is scheduled to show up every 4 minutes, and actually does so, then on average each car will have a similar load (subject to surges that will upset this), and riders can expect an average waiting time of half a headway. Even if they just miss a car, they know fairly certainly that the next one will be along soon, and it might even be in sight.

A chronic problem on all transit services is the bunching of vehicles that can yield two (or more) cars or buses close together followed by a long gap. When cars bunch, riders inevitably pack onto the first one. This is not simply a lemming-like desire to rush the first car, but the effect of years of experience telling riders than when there is a bunch, some of the cars will be short turned. If they are on the first one, they can at least drop back one car when this happens. If they are on the second or third in the parade, they may get dumped off and face the next big gap.

Some transit systems implement time points along a route where vehicles will hold for a scheduled departure time. A more sophisticated version of this is to hold in order to space out service regardless of the schedule. Riders do not care if a car (and its driver) are “on time”, only that the headway is close to the advertised value. It is the transit system’s problem to sort out operator crewing with schedules that can be achieved most of the time, but which are not excessively padded to the point service dawdles along a street. The latter has been a problem on some TTC routes where extra running time overshot the mark leading to annoyingly slow service and congestion at terminals where vehicles arrive early.

With the removal of much of the downtown congestion, and hence the variability in travel times for that part of the route, there was hope that headway reliability would improve. Results to date leave a great deal to be desired. There has been some reduction in the most annoying of wide gaps, but bunching remains a problem.

To be fair, when the scheduled headway is under 4 minutes, some bunching is inevitable. Even if cars leave the termini like clockwork, demands at stops vary as does the traffic enroute, and cars will get slightly off schedule. The follower will catch up, in part because of the lighter load from its shorter headway.

The TTC has a service quality target that all vehicles will leave their termini no more than 1 minute early or up to 5 minutes late. This is the only point on the route where schedule reliability is measured. (Until early 2015, the value was measured at several points along the route to provide a blended score, but this practice was dropped.) There are three basic problems with this scheme:

  • A terminus is the simplest place to monitor and dispatch service, and headway variations should always be the lowest at these points.
  • When the scheduled headway is small, the allowed 6-minute window for being “on time” permits vehicles to depart in bunches and still be “on time” because they remain within the allowed variation.
    • A perfect four minute headway would depart a terminal at 0, 4, 8, 12, 16, 20, 24 … minutes past the hour.
    • The same vehicles operating in pairs at 0, 7, 8, 15, 16, 23, 24 … would be “on time” because the alternate cars in the sequence are only three minutes late.
    • This problem is worse for wider scheduled headway because until the “five minutes late” line is crossed, the service is on time.
      • 0, 6, 12, 18, 24, 30, 36 … and 0, 11, 12, 23, 24, 35, 36 … are both “on time” but the latter actually provides a 12 minute headway of vehicles in pairs.

The TTC has, in effect, constructed a target for “on time performance” that considers bunched service to be acceptable even at a terminal. The problem with this is that as vehicles move along the route, the headway variations get bigger and bigger. It is ironic that even with this generous standard, actual service across the system does not achieve anywhere near the target on the streetcar or bus networks. The streetcar network itself went into a long slide through 2017 thanks to declining vehicle reliability and the proliferation of construction projects.

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The King Street Pilot: Sorting Fact From Fiction (Part III: Service Capacity)

An important issue for the King Street Transit Priority pilot is the rising demand on that corridor. Previous TTC stats showed a total of 65,000 riders using the 504 King and 514 Cherry lines combined, but this has now been updated to 71,000 even before the pilot began. Further growth comes from riders attracted to the improved service, and the line is now crowded beyond capacity at some times and locations.

The TTC has announced “improvements” from time to time on the King route, but this masks declines in service capacity.

The service design for the am peak period uses a base service about every 4 minutes overlaid by peak “trippers” that bring the headway down to about 2 minutes. However, the number of trippers has fallen over the years and in practice, the “wave” of very frequent service now lasts only about half an hour. This comes eastbound on King at Dufferin 6:50 and 7:20 am, westbound at Broadview between 7:45 and 8:15 am, and eastbound again between 8:55 and 9:25 am.

There are now seven trippers where once there were sixteen, and for some time streetcars on the trippers were replaced by buses at a lower capacity. Recently, peak vehicles were swapped between 504 King and 505 Dundas so that the trippers could revert to streetcar operation.

When buses began operating on 504 King, the TTC claimed that this was a service improvement. This was true for a time when buses allowed the service to build back to its previous high point, but over time the number of bus trippers fell.

Using the TTC’s vehicle tracking data, one can plot the actual capacity operated at various points and times on King Street. These are actual, not scheduled, capacities, and they reflect the day-to-day fluctuations in service and vehicle types. For the purpose of the charts here, the Service Standards planning capacities are used. These are not the crush capacity of vehicles, but a target level in Board-approved TTC standards for an average level of crowding that should not overwhelm the service with loading delays and severely uncomfortable conditions. Whether the TTC actually achieves this is another matter, but the numbers give an indication of the relative levels of service operated over time.

The Service Standards for peak period vehicle capacity are:

  • Bus: 51
  • Standard streetcar (CLRV): 74
  • Two-section streetcar (ALRV): 108
  • New five-section streetcar (Flexity): 130

[Service Standards at p. 10]

Here is an example of one chart showing capacity eastbound at Bathurst & King between 7:00 and 8:00 am from January 2016 to December 2017 (note that February 2016 data are missing).

The capacity provided here was at its height in the spring and summer of 2017 when ALRVs normally used on 501 Queen were redeployed to 504 King. In fall 2017, service levels were reduced because of the change in vehicle type.

Noteworthy in this chart is the growth in capacity provided by Flexitys first on 514 Cherry (building up to full low-floor operation by mid 2017) and more recently with the addition of the new cars to 504 King. Although they do not make up half of the vehicles operating on King, they account for half of the capacity in the central section.

For a longer-range view of capacity, here is the same chart with data (where I have the details) going back to December 2006. This illustrates the long period during which the capacity provided on 504 King was static even as land along the route redeveloped. This is a chronic problem on the streetcar routes because an order for new cars and a larger fleet was delayed so long.

The sets of charts below illustrate capacities at five locations and times. Each set contains four charts covering the peak periods from 6-10 am and 3-7 pm depending on which period is illustrated.

Jameson AM Peak EB

Service eastbound at Jameson does not include the 514 Cherry cars which enter the route at Dufferin. Flexitys appear here only after their recent addition to 504 King. Note how the capacity provided here drops in the hour from 8-9 am compared to those on either side of it.

Bathurst AM Peak EB

Service eastbound at Bathurst includes the 514 Cherry cars and the growing contribution of Flexitys on this route is evident from June 2016 onward.

Yonge PM Peak WB

The PM peak service design is different from the AM in that there are few or no trippers (depending on which schedule one considers), and so this location has been less affected by cutbacks in that part of the service. However, service capacity has not changed much over the past two years especially during the peak 5-6 pm hour.

Bathurst PM Peak WB

The situation at Bathurst is similar to that at Yonge, although it can be affected by cars short-turning at Spadina. After the 503 service is added in February, the capacity at Yonge will be slightly higher than at Bathurst.

Jameson PM Peak WB

The capacity of service outbound west of Dufferin is, if anything, lower now than it was in past years. This reflects the concentration of service east of Dufferin with the coming of the 514 Cherry route.

In summary, riders who believe that service, as measured by capacity, has been better in the past are in many cases correct. An important part of the King Street Pilot will be to determine how much latent demand can be attracted to the route through the combination of lower travel and wait times, and greater route capacity.

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The King Street Pilot: Sorting Fact From Fiction (Part II: Travel Times)

On the Torontoist, I wrote an article reviewing experience with the King Street Transit Pilot and some of the preliminary claims and reactions to it. This piece is the first of the technical follow-ups to that article with more detailed data about the behaviour of transit service on King.

Note that this analysis only covers the operation of transit vehicles, not of general traffic. For information on other data collected by the City of Toronto, please refer to the “data” page on the project’s site.

This article deals with travel times on various parts of the King route both inside and outside of the Bathurst-Jarvis pilot area. Following articles will address capacity and service reliability.

For a review of operations up to the end of November 2017, please see:

Averages versus Individual Data

In reporting the change in travel times, the City of Toronto cites averages, maxima and minima for the “before” and “after” conditions. For example, in the chart below, eastbound trips in the PM peak before the pilot ranged in length from 13.0 to 25.0 minutes with an average of 18.9.

However, the “before” numbers omit some of the worse cases for travel times:

  • The period of the Toronto International Film Festival from September 7-17, 2017. During early days of TIFF, service was diverted via Spadina, Queen and Church adding greatly to travel times. Even after King Street nominally reopened, service was interrupted from time to time with unannounced diversions.
  • The period of track construction at Queen and McCaul Streets from October 16-27, 2017. This period saw 501 Queen streetcars shift south to King adding turning movements at Church eastbound and Spadina westbound that took place generally without any transit priority. Some traffic spillover from Queen to adjacent streets occurred, but this was not measured.

Gray: Pre-pilot Pink: November Mauve: December

Although omission of these two periods puts the best possible light on the “before” conditions and avoids criticism that the project is making a worst/best case comparison, it is a fact of life that service and travel times on King are routinely affected by various projects including construction and special events. A valid test for the pilot will be the street’s operation during a Queen Street shutdown for an event at City Hall or at Much Music. How will transit service and other traffic behave when part of the downtown network is taken “offline”? This remains to be seen.

The averages are the most commonly cited data in the press and in political comments. However, these averages hide a great deal.

  • Travel times vary considerably from hour to hour, and from day to day.
  • A three-hour average over the peak period includes many trips that occur under less-than-peak conditions, and this pulls down the averages.
  • Averaging data for several weeks smooths out the effect of daily variation.
  • Averaging over the entire pilot area merges data from areas where the pilot’s effect is small with those where it is large.
  • Averaging over only the peak periods misses the benefits, if any, of the pilot for off-peak operations.

Continue reading →

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The Bogus Business Case for Fare Integration

In my reporting of the September 2017 Metrolinx Board Meeting, I reviewed a presentation on Regional Fare Integration. At the time of writing, only the summary presentation to the Board was available, but the full Draft Business Case appeared some time later. This is the sort of timing problem that Metrolinx has vowed to correct.

A basic problem with such a delay is that one must take at face value the claims made by staff to the Board without recourse to the original document. This will mask the shortcomings of the study itself, not to mention any selective reinterpretation of its findings to support a staff position.

In the case of the Regional Fare Integration study, this is of particular concern because Metrolinx planners clearly prefer that the entire GTHA transit structure move to Fare By Distance. However, they keep running into problems that are a mix of organizational, technical and financial issues, not to mention the basic politics involved in setting fares and subsidies. If FBD is presented as the best possible outcome, this could help overcome some objections by “proving” that this is the ideal to which all systems should move.

At the outset, I should be clear about my own position here. The word “Bogus” is in the article’s title not just because it makes a nice literary device, but because I believe that the Fare Integration Study is an example where Metrolinx attempts to justify a predetermined position with a formal study, and even then only selectively reports on information from that study to buttress their preferred policy. The study itself is “professional” in the sense that it examines a range of options by an established methodology, but this does not automatically mean that it is thorough nor that it fully presents the implications of what is proposed.

The supposed economic benefit of a new fare scheme depends largely on replacement of home-to-station auto trips with some form of local transit (conventional, ride share, etc) whose cost is not included in the analysis. This fundamentally misrepresents the “benefit” of a revised fare structure that depends on absorption of new costs by entities outside of the study’s consideration (riders, local municipalities).

The set of possible fare structures Metrolinx has studied has not changed over the past two years, and notably the potential benefits of a two-hour universal fare are not considered at all. On previous occasions Metrolinx has treated this as a “local policy” rather than a potential regional option, not to mention the larger benefits of such fares for riders whose travel involves “trip chaining” of multiple short hops.

One must read well into the report to learn that the best case ridership improvement from any of the fare schemes is 2.15% over the long term to 2031, and this assumes investment in fare subsidies. Roughly the same investment would achieve two thirds of the same ridership gain simply by providing a 416/905 co-fare without tearing apart the entire regional tariff. In either case, this is a trivial change in ridership over such a long period suggesting that other factors beyond fare structure are more important in encouragement or limitation of new ridership. Moreover, it is self-evident that such a small change in ridership cannot make a large economic contribution to the regional economy.

Specifics of the Board Presentation

The Board Presentation gives a very high level overview of the draft study.

On page 2:

The consultant’s findings in the Draft Preliminary Business Case include:

  • All fare structure concepts examined perform better than the current state, offering significant economic value to the region
  • Making use of fare by distance on additional types of transit service better achieves the transformational strategic vision than just adding modifications to the existing structure, but implementation requires more change for customers and transit agencies
  • More limited modifications to the status quo have good potential over the short term

“Significant” is the key word here, and this is not supported by the study itself. Ridership gains due to any of the new fare structures, with or without added subsidies, are small, a few percent over the period to 2031. The primary economic benefit is, as the draft study itself explains, the imputed value of converting park-and-ride trips to home based transit trips thanks to the lower “integrated” fare for such services, encouraged possibly by charging for what is now free parking.

A large portion of automobile travel reduction benefits come from shift from park and ride trips to using transit for the whole trip – highlighting the importance of exploring paid parking to also encourage a shift from automobile for transit access. (p. xiv)

However, local transit (be it a conventional bus, a demand-responsive ride sharing service, or even a fleet of autonomous vehicles) does not now exist at the scale and quality needed, and this represents a substantial capital and operating cost that is not included to offset the notional savings from car trips.

Fare by distance does perform “better” than the alternatives, but none of them does much to affect ridership. Moreover, the fare structure, to the limited extent that the study gives us any information on this, remains strongly biased in favour of cheaper travel for longer trips. An unasked (and hence unanswered) question is whether true fare by distance and the sheer scale of the GTHA network can exist while attracting long-haul riders and replacing their auto trips with transit.

On page 3, the presentation includes recommendations for a step-by-step strategy:

  • Discounts on double fares (GO-TTC)
  • Discounts on double fares (905-TTC)
  • Adjustments to GO’s fare structure
  • Fare Policy Harmonization

This is only a modest set of goals compared to a wholesale restructuring of the regional tariff, and it includes much of what is proposed by “Concept 1” in the study – elimination of the remaining inter-operator fare boundaries, restructuring GO fares (especially those for short trips) to better reflect the distance travelled, and harmonization of policies such as concession fare structures and transfer rules.

Further consultation is to follow, although as we now know, the first of the four steps has already been approved by TTC and Metrolinx.

On page 6:

Without more co-ordinated inclusive decision making, agencies’ fare systems are continuing to evolve independently of one another leading to greater inconsistency and divergence.

This statement is not entirely true.

  • The GO-TTC co-fare is an indication of movement toward fare unification, although the level of discount offered on TTC fares is considerably smaller than the discount for 905-GO trips. That distinction is one made by the provincial government as a budget issue, and it cannot be pinned on foot-dragging at the local level.
  • Assuming that Toronto implements a two-hour transfer policy later in 2018 (and the constraint on its start date is a function of Presto, not TTC policy), there will be a common time-based approach to fares across the GTHA. All that remains is the will to fund cross-border acceptance of fares (actually Presto tap-ons) regardless of where a trip begins.

Without question, there should be a catalog of inconsistencies across the region, and agreement on how these might be addressed, but that will involve some hard political decisions. Would Toronto eliminate free children’s fares? Would low-cost rides to seniors and/or the poor now offered in parts of the 905 be extended across the system? Will GO Transit insist on playing by separate rules from every other operator as a “premium” service? These questions are independent of whether fares are flat, by distance, or by some other scheme as they reflect discount structures, not basic fare calculations.

Pages 6 and 7 rehash what has come before on pp. 2-3, but the emphasis on fare by distance remains:

Fare by distance should be a consideration in defining the long-term fare structure for the GTHA. [p. 7]

“A consideration” is less strong language than saying that FBD should be the target framework. If this is to be, then Metrolinx owes everyone with whom they will “consult” a much more thorough explanation of just how the tariff would work and how it would affect travel costs. The draft report is quite threadbare in that respect with only one “reference” tariff used as the basis for a few fare comparisons, along with a caveat that this should not be considered as definitive. That is hardly a thorough public airing of the effects of a new fare structure.

No convincing rationale has been advanced for moving to a full fare by distance system, including for all local travel, and it persists mainly because Metrolinx planners are like a dog unwilling to give up a favourite, long-chewed bone. At least the draft study recognizes that there are significant costs, complexities and disruptions involved with FBD, begging the question of why it should be the preferred end state.

On page 8:

Amend [GO Transit fares] to address short/medium trips and create a more logical fare by distance structure based on actual distance travelled instead of current system to encourage more ridership.

This is an odd statement on two counts:

  • Lowering fares for short trips will encourage demand on a part of the GO system that overlaps the local TTC system, and will require capacity on GO that might not be available, especially in the short term before full RER service builds out.
  • True FBD will increase long trip fares on GO and discourage the very long haul riders whose auto-based trips GO extensions were intended to capture. The reference tariff implied by sample fares in the draft report is most decidedly not FBD with short haul fares at a rate about four times that of long hauls.

In other words, the goal as presented to the Board does not match the actual sample fare structure used in the draft study.

On page 14:

GO/UP uses tap on/off, other agencies are tap on only. Emerging technological solutions may allow tap on-only customer experience while maintaining compatibility with fare-by-distance or –zone structures.

The technology in question, as described in the study, would require all Presto users to carry a GPS enabled device that could detect their exit from vehicles automatically without the need to physically tap off. This requires a naïve belief that all riders will carry smart mobile devices to eliminate the congestion caused by a physical tap on/off for all trip segments, and is is a middle-class, commuter-centric view of the transit market.

On page 15:

Completely missing from the discussion is any consideration of loyalty programs such as monthly passes or other “bulk buy” ways of paying fares. Already on the TTC, over half of all rides (as opposed to riders) are paid for in bulk, primarily through Metropasses. GO Transit itself has a monthly capping system which limits the number of fares charged per month, and software to implement the equivalent of a TTC Day Pass through fare capping is already in place on Presto. (It has not been turned on because of the possible hit to TTC revenues if riders were to start receiving capped fares without having to buy a pass up front.)

Several issues are listed here that reflect the complexity of a system where the lines between local and regional service have already started to blur, and where simplistic segmentation of classes of service simply do not work. The argument implicit in this is that only a zonal or distance based fare will eliminate many of the problems, but there is no discussion of the benefits obtained simply by a cross-boundary co-fare plus time-based transfer rules to benefit multiple short-hop trips. This demonstrates the blinkered vision at Metrolinx and a predisposition to distance-based “solutions”.

For those who will not read to the end of the detailed review, my concluding thoughts:

There are major gaps in the analysis and presentation of the Draft Report. By the end of the study, it is abundantly clear that the target scheme is FBD and future work will aim in that direction. Metrolinx’ FBD goal has not changed, and this begs the question of how any sort of “consultation” can or will affect the outcome.

The remainder of this article examines the 189-page Draft Report and highlights issues in the analysis.

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TTC Service Changes Effective January 7, 2018

There are few changes planned for the January 2018 schedules.

2018.01.07_Service_Changes

14 Glencairn is the latest of many routes to get additional running time compensating for the Crosstown LRT construction. Oddly, the end date shown for this change is December 2022 where all other Crosstown-related end dates are in 2021.

Supplementary service on 32 Eglinton West is being reorganized. There are currently several Service Relief buses operating from Mt. Dennis during most operating periods. These will be replaced by peak-only buses from various garages.

75 Sherbourne trips at the start and end of service are being changed to begin/end at Sherbourne Station rather than at South Drive in Rosedale.

The official route and stopping arrangements for various lines serving Finch West and Pioneer Village Stations have been clarified for periods when these stations are closed.

The TTC has already confirmed through the media that due to the late delivery of Flexitys from Bombardier, there will be bus substitutions on 505 Dundas and 506 Carlton starting with the February 18, 2018 schedules. This is also related to service reorganization to boost capacity on King Street. I will report the details when they are available.

(Bus trippers originally planned for 504 King are now actually operating on 505 Dundas replacing CLRVs that have been redirected to King Street for extra capacity.)

It should be noted that due to track construction on Broadview planned in 2018, there will be effects on the Carlton, Dundas and King routes that will probably last two schedule periods.

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Analysis of Routes 501 Queen and 6 Bay: November 2017 (Part 2: Preliminary King Street Pilot Review)

This is the second article reviewing the effects of the pilot King Street transit priority scheme. Part 1 looked at the behaviour of the 504 King streetcar route, and Part 2 concerns the operation of 501 Queen and 6 Bay during the same period.

Among the effects anticipated from the pilot was an increase in traffic on parallel streets with the effect reaching as far north as Queen Street. Queen suffers badly during the shutdown of King for TIFF in September, and by extension some problems were expected to show up with the pilot’s changes changes on King.

Another effect that was expected was congestion on the north-south streets crossing King. Only one transit route in mixed traffic, 6 Bay, operates on such a street.

The City of Toronto is monitoring traffic behaviour on many streets in the study area and will publish their own preliminary findings in mid-December.

The charts presented here are in the same two formats as those in Part 1:

  • One pair of charts shows the travel times between Bathurst and Jarvis on Queen, and between Dundas and Front on Bay, both ways. Each day’s data are plotted individually to show the difference between individual trips, the evolution of travel times over the day, and the degree of dispersion in travel time values (i.e. the predictability, or not, of travel time for any journey).
  • One pair of charts shows average times, by hour, for each day to illustrate daily fluctuations and any before/after changes concurrent with the King Street Pilot.

For both routes, there is almost no change in the average travel times after the pilot began. Values on Queen bounce around a lot, but they do so both before and after the pilot began.

There is a quite striking weekly pattern with much higher than usual averages during the PM peak eastbound on Queen and southbound on Bay with low values usually on Mondays, and much higher values later in the week. This shows the importance of studying route behaviour over several days, while remaining aware that external events can create patterns in the data, or can create one-time disruptions for special events such as parades or sporting events.

501 Queen:

6 Bay:

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TTC Board Meeting: November 28, 2017 (Updated)

Updated December 1, 2017 at 11:15 am:

The preliminary City of Toronto operating and capital budgets were presented at Toronto’s Budget Committee on November 30, 2017.

Operating Budget

To no great surprise for seasoned budget watchers, the Two Hour Transfer was not included in the funded budget, but instead appears among a long list of unfunded new or enhanced services. The total value of these proposals is $41.3 million (after considering any associated revenue), and they are competing for a much smaller amount of available headroom in the operating budget. (The list is on pp 12-14 in the appendices linked above.)

Although Council may approve many wonderful initiatives and the Mayor may hold many press conferences and photo ops exulting in the decisions, the money to pay for them is often not part of Council’s decision. What actually happens is that these are “nice to haves” thrown into the coming year’s budget hopper on the off chance funding will materialize by budget time. This has the effect of throttling the will of Council and feeding all of its decisions through the much more conservative outlook of the Budget and Executive Committees.

Council further limits this process by passing a budget directive early in the cycle (usually late spring) directing that property taxes for the coming year not rise by more than the rate of inflation. The actual increase is below inflation because commercial property rates are on a long downward trend thanks to rules imposed by Mike Harris to rebalance the relative tax levels for commercial and residential properties in Toronto. This will not complete until, probably, the 2021 budget after which tax increases will apply equally across the board.

Of the new revenues Toronto will receive in 2018, property taxes are actually only a small component, but Council debates inevitably turn on this source as a benchmark. The actual tax increase anyone sees is the result of several factors:

  • the tax rate change for their property class;
  • changes, if any, in separate levies such as the Scarborough Subway tax and the Mayor’s Infrastructure tax;
  • updated and/or phased in changes to the assessed value of property;
  • policy directions such as rebalancing rates between property classes (e.g. commercial vs residential).

Other new revenues can flow to the City through various rate structures notably TTC fares, although these have been frozen for 2018. A small increase in fare revenue is expected compared to the 2017 budget thanks to a changes in the relative number of fares paid of each type (passes, tokens, cash).

As things stand today, the funding to pay for the Two Hour Transfer simply isn’t there, but it may be found, almost like magic, as the budget process unfolds from now through February 2018 at Council. Another transit fare proposal, the first phase of the “Fair Fare” scheme in the Poverty Reduction Strategy, is also not funded.

This process creates a drag on implementation of new programs unless there is strong political support from the Mayor and his voting block on Council, and should serve as a warning to advocates for schemes such as the Ridership Growth Strategy. With luck, there will be proposals before the TTC Board before the hiatus of meetings for the 2018 elections, but anything the Board approves will be considered as an “enhancement” going into 2019 and could well be derailed. Add to this the chronic problems of vehicle and garage space shortages at the TTC, and there is a recipe for seeing little real growth in service until at least the 2020 budget year if not later.

This is the combined effect of a process that has valued capping spending above all other goals for many years. Infrastructure that would be needed to support growth doesn’t exist and has a multi-year lead time, and even the vehicles the TTC owns run less service than they could because improving service never comes with enough revenue to cover costs.

Passengers who have shorter waits or are less crowded do not represent extra revenue, and the marginal gain lies only with new fare-paying trips attracted to the TTC. On a grand scale this is seen for 2018 with the Vaughan subway extension where net new revenue does not come close to paying for the added operating cost of service, but this happens at a smaller scale whenever a bus runs more often and less crowded, but mainly with passengers who were already on the system.

A further problem for constrained budgets is that the cost of existing service goes up through inflationary pressure, and the population requiring municipal services including transit continues to grow. City management use that growth to show how the tax burden is actually declining on a per capita basis from $4,480 in 2010 to $4,262 in 2018 (presentation, p 17), and this is considered to be virtuous when in fact it shows not just “efficiency” but also a decline in service provided. The effect on individuals varies depending on which municipal services they consume, and the program-by-program effect is never reported.

Every year, the budget is hauled into balance through a combination of new revenues, reduced expenditures and “bridging”, a term for various accounting “fixes” that get the City past short-term problems. (Apologies for the subtlety of the colour changes in the chart below. It is from the City presentation.)  Note that the values below are “deltas”, the change from year to year, not the total revenue or spending in each category. Expenditure cuts (darker blue) have been a large chunk of the savings in recent years. By comparison, TTC fare increases are small change within the larger City context and, of course, there is no increase in 2018, a policy direction endorsed during the 2017 budget cycle.

However, City budgets are debated at the margin in that any fine tuning is achieved by tweaking revenue sources to accommodate new spending, and the proportional effect on thinks like fares, property taxes and other user fees tends to be higher than for the budget as a whole. The reason for this is that much of the City’s revenue comes from sources that Council cannot “tweak” in the course of setting its budget, and so the effect on what remains is higher.

The TTC Board decided that it would include the money sitting in the Transit Stabilization Reserve as 2018 revenue, just as they did in 2017 (although in fact this was not needed because of better-than-budget results). This keeps the year-to-year subsidy increase down to $24 million paying mainly for the new cost of the TYSSE and for transitional increases in fare handling while Presto and the legacy fares both remain in place. Using that reserve is an example of a “bridging strategy” because the reserve will not be available in 2019 if it is depleted  in 2018, and new revenue will be needed to replace it. That $24 million pressure from the TTC (with more to come from unfunded proposals) crowds other City departments and agencies by taking the lion’s share of new spending.

Among the factors listed in the revenue and expenditure changes for 2018 (p 27), there is a section headed “Prior Year Decisions”. This includes the TYSSE effect, but does not include the cost of the fare freeze decision on the 2018 revenues.  Had there been a fare increase, politicians would be forced to explain to riders how opening a new subway is not free and how York Region gets a free ride on Toronto taxpayers.

The City’s overall revenue and expense budget is summarized in the chart below. The TTC’s total expenditures of $1.974 billion consume about 18% of the budget, but 63% of this is paid for through the farebox. (Note that there is a common problem when “farebox” recoveries are cited for the TTC because other revenues such as advertising and parking are sometimes erroneously included as if they were rider contributions. Also, occasionally, the TTC funds some capital costs from current revenues and these do not properly belong in the “operating cost recovery” calculation.)

When the available revenue including assessment growth and inflation in property taxes are considered, the City has a small surplus of $3.4 million in the preliminary budget. A further $5 million will be available from a pending change in taxation of vacant property, although Council has already directed that this go toward the Poverty Reduction Strategy. Without further adjustments, these are the only funds now available to pay for the $41 million in approved but unfunded initiatives including the Two Hour Transfer.

Capital Budget

On the Capital side, there are a few points worth noting in the City Budget that bear on the TTC’s funding.

The City of Toronto has a policy that total debt service payments should not exceed 15% of property taxes. This was changed in recent years from a hard cap to one that considered the 10-year average debt ratio mainly to deal with a bulge in borrowing that will peak in 2021. That bulge would affect projections well into the next decade as lower-than-average borrowing in 2018-19 slips off of the chart but must be replaced by comparably low numbers in 2028 and beyond to hold down the average while the 2021 peak is “digested”.

Various adjustments to the budget change the shape of this chart and somewhat tame the peak. There are additions (funding for TCHC repairs and other unspecified “unmet needs”), but new provincial gas tax revenue announced in 2017 allows a reduction in the debt load producing the revised chart below.

The debt limitation, together with limited provincial and federal funding, is directly responsible for the TTC’s enormous list of unfunded projects. The new gas tax revenue will generally not go to transit projects (except possibly under “unmet needs”), but will offset other City borrowing needs.

Another change in projected City financing will be an increase in the “Capital from Current” amount. The proportion of funding provided by this source will rise from 12% of the 2018 budget to 22% in the ten year plan while debt falls from 32% to 22%. This will shift more of the spending in later years of the plan into the operating budget, although the dollar increase may be offset by a reduction in total annual funding needs assuming no major projects are added without dedicated revenue sources and/or subsidies from other governments.

Even with all of this spending, the “state of good repair” backlog across the city will continue to grow, notably at the TTC. This plan understates future funding requirements by its failure to include the TTC’s SOGR projects that are known to exist, but not included in the City’s plans. (Some other City departments, notably Transportation and Facilities Management, also have large unfunded repair backlogs. See p 63 of the presentation.)

Updated December 1, 2017 at 9:15 am:

The budget presentations, which contain slightly different information from the budget reports, are now online.

The Capital presentation has a more detailed breakdown of the “Capacity to Spend” reduction, and I have added this, plus a few comments, to that section of the main article (scroll down to the end).

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Mayor and TTC Chair Advocate For Time Based Transfers

Mayor Tory, TTC Chair Josh Colle and TTC Commissioner Mary Fragedakis have requested that TTC staff report later this month on the “costs and any other implications for the introduction of time-based transfers for PRESTO users” in 2018. This would make the single fare a payment for a limited-time pass rather than for an unbroken trip subject to transfer rules that predate the TTC’s origin nearly a century ago.

This proposal is pitched both as a way of assisting low-income riders (for whom multiple short trips by transit can be quite expensive) and local businesses (who would benefit from the hop-off, hop-on behaviour), as well as a way to reduce fare evasion whose cost is pegged at about $15 million annually. The more cynical among us would note that the change simply makes “legal” a behaviour TTC riders have engaged in since the dawn of time – maximizing the amount of travel possible for one fare.

The Presto smart card’s  operation would be greatly simplified with the elimination of the byzantine logic required to validate transfers between vehicles, and it would also remove the source of many disputes about overcharges when Presto does not recognize a change of vehicles as a legitimate part of a continuous trip.

This would also make fare integration across the 416-905 border simpler by unifying TTC transfer policies with those of the local 905 systems. What remains is the need for a funding mechanism to provide a co-fare arrangement between operators.

This is a surprising reversal for Tory and Colle who, in past years, treated the time-based fare as “too expensive” despite its many advantages. Previous estimates pegged this at a $20 million annual cost.

With CEO Andy Byford showing strong support for this policy as part of a Ridership Growth Strategy, the move is clearly on to make this change. The timing for the election year is an extra benefit for politicians looking for a transit improvement.

Now if only they would fund better service.

Postscript:

This should be the final nail in the coffin for the ill-conceived Metrolinx proposal to shift transit fares to a distance-based charge. With all of the GTA operating on a time-based system, and zones vanishing internally (York) and between regions (cross border fare sharing), there is zero justification for a wholesale upheaval in a flat fare arrangement. Metrolinx should wake up and drop this from its policy proposals.

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TTC Plans Flatlined Service and Fares for 2018 (Updated November 17)

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.

Ridership

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:

Increases:

  • 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.”

Reductions:

  • 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.

Expense Risks

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.

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