This TTC meeting proved something of a surprise considering what was on the table:  a fare hike of at least a dime, maybe more, as well as widespread cuts to service on the network.  What actually happened was that Chair Karen Stintz proposed an alternative position based on the discovery of some wiggle room in the 2011 and 2012 budgets.

• The rise in diesel fuel costs was originally projected at a higher level, $5-million worth, than what the TTC actually expects to pay based on current market trends.  Part of this money will be used to put off any service cuts to the schedule period that begins in mid-February, and the rest will be used to preserve existing service on a few “busy” routes through 2012.
• The projected “surplus” of $12-million on the 2011 operating budget may be directed to pay, in part, for an order of new buses so that service can be maintained.  About $45m is needed both for the bus order and for yard space in which to store the vehicles.
• Cancellation of Wheel-Trans service for dialysis patients has been put off to June 30, 2012 to give more time for development of an alternative service and/or funding sources.

The Commission also approved a 10-cent fare increase for January 1, 2012 and, in principle, similar increases at the beginning of years 2013 through 2015.

TTC Announcement

The deferral of service cuts to February will allow the whole matter to be debated at Council (where it should have been in the first place) so that a decision can be made there on any possible increase to the TTC’s operating subsidy and the broader questions of future service quality.  Meanwhile, TTC staff will put together a proposal for which routes are busy enough to warrant continuing service at 2011 levels through 2012.

This is a strange turn of events.  Quite recently, staff proposed cuts based on loading standards that, if they were already being observed, would mean that buses had room for more riders.  In practice, service on the street is not as good as staff claims, especially when allowance is made for the gap between the advertised frequency and reliability on the schedule and real life operation.  Between the riding counts used to justify cuts in May 2011 and the tacit admission that plans for 2012 service cuts were ill-considered, the credibility of TTC Service Planning in reporting actual conditions leaves much to be desired.

If we cannot count on staff information to be accurate, how can anyone make intelligent policy decisions?  This is a problem throughout the City’s 2012 budget process where information comes out only because Councillors who are not in the Ford camp pursue the details.

Commissioner Maria Augimeri screened a video of conditions on the Finch West bus.  The first bus coming by does not even stop because the operator doesn’t think he can fit any more people on.  If you pause the video, you will see that there appears to be space on board, but the bus is crowded at the front, and that’s what the operator bases his opinion on.  So much for “room at the back”.  This type of pass-up is reportedly quite common.  The next bus is very crowded, and we view the ride from the front vestibule where, strictly speaking, there should be no passengers.

Many people representing a wide variety of communities and backgrounds urged that the TTC not raise fares and cut service.

One speaker challenged the TTC and members of Council to “walk in their shoes” and take the TTC for a week.  Several Commissioners declined, while a few noted that they are already on the TTC.  Oddly enough, Commissioner Crisanti, a Ford loyalist from Rexdale who is normally rather out of touch on TTC matters, took an interest in this deputation, probably because the group behind the video is from his ward.

There was a bit, but not much, open harrassment of public speakers by members of the Commission unlike the way the Budget Committee treated the hundreds who spoke there over two days.  That’s just as well.  Insulting the public would only further undermine the dwindling credibility of the commissioners.

Transit City came up frequently in the deputations.  Unlike previous occasions, speakers were not stopped from addressing this topic because the Chair cannot claim that cancellation of the LRT network and the overall quality of the TTC are not linked.  We have billions for Eglinton and Sheppard tunneling, little of which will co me from the private sector, but we don’t have money to operate the basic transit services.  Hoped-for improvements, notably on Finch West, won’t happen because the LRT line was cancelled, and the TTC has no buses or budget headroom for service improvements, let along the capital cost of any transit priority scheme.

Councillor Joe Mihevc, former Vice-Chair of the TTC in the Miller administration, proposed that Council should vote for the original Transit City plan with Eglinton underground only from Black Creek to Brentcliffe, and that all work on the Sheppard subway scheme should stop.  This was, of course, ignored by the Commission, but the idea shows where Council’s left is headed going into 2012.

Word on the street has Queen’s Park just waiting for Council to actually take a position on Toronto’s transit plans, a vote that has never been held even though the Mayor committed to getting Council approval for his agreement with Premier McGuinty.  The open statement from Ford’s consultant, Gordon Chong, that the Sheppard line will attract at best 30% private sector financing, leaves the Sheppard proposal in ruins.  If such a vote reaches the floor of Council, will enough of the “mushy middle” tell Rob Ford to take his plans and get lost, and affirm Council’s commitment to proposals much closer to Transit City?

In other news, the Humber Bay bus issue was put over to February’s meeting so that consultations with the neighbourhood can take place.

There was no supplementary agenda, and the issue of TTC relations with Metrolinx and the status of the Eglinton-Crosstown line was put off to January’s meeting.

The original post previewing the meeting from December 11 follows below.

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Ridership projections for the TTC continue to climb with the year-end total now projected at 499-million, up 2-million from an estimate only one month ago.  The TTC’s “surplus” (actually a decrease in the projected subsidy level from the original budget) is also growing thanks to higher fare revenue and cuts in projected spending for the remainder of 2011.

The details are included in the Chief General Manager’s report covering the system’s operation up to the end of October 2011, but with year-end projections based on more recent experience.

With discussions of the TTC’s 2012 budget still swirling at City Hall, the update to projected 2011 figures raises questions about just how much money the TTC actually needs to balance its books and how much service will actually be required in the new year.

Comparing 2011 projections as they appear in the current report and in the November 23 version, we can see where the year-end estimates have changed.

2011.12.08 CGM Comparison

Revenue from fares is projected at $3.4m more than in the November estimate.  Although there will be 2m more rides, some of the increase reflects travel by passholders that contributes no marginal revenue.

Overall ridership is running at 4.9% over 2010, almost 2% higher than the commonly used 3% rate in many projections.

On the expense side of the ledger, some projected costs have fallen.  The saving from “gapping” (leaving vacant positions open longer than planned in the budget) is up by $0.7m, and other reductions will save $1.8m.  The one-time cost of Corporate Restructuring (downsizing ) is now estimated at $3.0m less than expected.  This gives a total reduction in expenses of $5.5m compared to the November estimate.

The combined effect is that the projected “surplus” is now about $9m greater than the November estimate.  Whether this has been included in the City’s budget projection of the overall corporate surplus is unclear given that these number have only just been published.  (Of course, this is not a true “surplus”, but an underspending against the original budget.  However, some of the budgeted “revenue” comes from reserves, and underspending reduces the draw from that source leaving more money in the pot for future years.)

Looking at any financial statements, it is important to distinguish between one-time costs and the ongoing expenses of an organization.  Because only the variations to budget are reported, we can only see the budget lines where these occur, but it’s worth noting that if the net effect of one-time items is eliminated, the surplus would be about $7m higher.  Some of these items are non-cash bookkeeping entries that cancel each other out, but the cost of downsizing TTC staff is a real cost that applies only to 2011.

The proposed 2012 budget includes a 10-cent fare increase to adult tokens and to senior/student tickets with roughly proportional changes to other types of fare (see page 11 of the linked report).  TTC staff have been asked by the City’s Budget Committee to report on an option for a 15-cent fare increase that would generate enough additional revenue to reverse the proposed January 2012 service cuts.  This analysis will likely appear before the TTC Commission meets on December 14, and I will update this post when the report is available.

Based on recent strength in ridership, the TTC now projects that 2012 riding may reach 507-million rather than the originally estimated 503m.  This pushes the revenue estimate for 2012 by $5m.  However, if the actual 2012 results come in at 499m, even at 507m the 2012 ridership would only be up by 1.6% showing the combined effect of demand growth and riding lost to the fare increase and service cuts.  If service is retained at the current loading standards and if the fare increase has no effect on riding (as happened when the TTC raised fares by 25-cents in 2010), then ridership could grow by 3% or more taking us to at least 514m in 2012.

This has major implications for service planning next year and beyond.  TTC staff project that at the 507m level, $1-2m worth of additional service will be required in September 2012.

Multi-year projections in the budget report are already falling behind likely ridership levels.  Without a fare increase (or equivalently with no drop-off in demand caused by higher fares), the TTC projects 2013 ridership at 515m or only 3.2% above the projected 2011 total.  To 2015, the projection is 536m or 7.4% above 2011.  If the presumed effect of higher fares is included, the 2015 figure is even lower at 523m.  These are very conservative estimates, and all of them include the effect of service standards cuts that may not actually take effect.

If ridership were to grow at 3% compounded from 2012 through 2015, the TTC would reach about 562m rides in four years’ time.  That’s a lot of additional riding and service, and it would be borne by the existing system as no rapid transit expansion is planned until mid 2015 at the earliest (the Spadina extension).

Although the TTC does provide pro-forma budget estimates for 2013-15, these are based on conservative assumptions and do not provide a broader view of the decisions and options facing the transit system in coming years.  Whether such a discussion would be welcomed at City Hall is anybody’s guess — more spending on transit is probably the last thing the right wing of Council and the Mayor want to hear about.  However, this puts calls for much improved subsidies both from the City and Queen’s Park in the spotlight.

Anyone who may call for higher subsidies really needs to understand where transit in Toronto could be headed.  If we ask for more money based on too-conservative estimates, we will be right back at a point where funding seems inadequate, never catching up to actual demand.  Even worse, if that funding is used primarily to flat-line fares, the crunch on service will tighten and transit will be even more inconvenient relative to driving.

Debates about the future of transit cannot be put off indefinitely with the claim that we can’t afford to improve the system (except for the odd multi-billion dollar subway scheme).  The pressure for more capacity in our transportation network won’t vanish simply through political rhetoric.

TTC budget debates continue to focus on one-year views, on shuffling a few millions here and there on a table where billions are at stake, on scoring political points against competing views of what transit should be.  That’s no way to serve the riders, the citizens of Toronto.

Over at Torontoist, I have posted an article about the TTC’s budget presentation of December 6.  Among the issues discussed are:

• What are the implications if Council were to move to roll back the TTC service cuts planned for January 2012?
• What will the new loading standards, if they are retained, mean for transit riders?
• Why is the proposed fare increase disproportionately high for seniors and students, and why is at least 20% of the additional revenue going to subsidize Wheel-Trans rather than maintaining the quality of regular service?
• When will the SRT conversion to LRT actually happen, and when will the line re-open?  Confusion at the TTC had everyone thinking a seven-year shutdown was in the works.

I plan to add to this post with additional information about the TTC’s budget presentation, but have other things on my plate at the moment including a talk tonight (December 7) at Metro Hall, Room 310, 7 pm for Post Carbon Toronto.

Toronto launched its 2012 budget on November 28, 2011 with an overview presentation.  Much of this has nothing to do with transit, and I will leave analysis of the full budget to others.  For those who like the details, further information about the TTC’s Operating, Wheel-Trans and Capital Budgets can be found in the Analyst Notes.

The City’s Budget Committee will consider details of the TTC budgets on December 6, 2011, and the Commission will debate the final version of its budget on December 14.  Everything goes to Council on January 17, 2012.

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