Finance

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The “Ooops” Factor in Planned Service Cuts (Updated)

Updated January 20, 2011 at 9:30 pm:

The table showing the route cuts linked in this article contained an error, and this has been corrected.  In the original table, I calculated the imputed cost/hour and cost/passenger of the services under review by dividing the annual vehicle hours saved and passengers affected into $7-million.  However, that saving would only have taken place over 9 months, and its annual value would have been about $9.33m.

Therefore, the imputed values, corrected for full-year savings, are $70.74 per vehicle hour and $7.16 per rider.  Some reports have claimed that the current subsidies are $30/rider, and this is not borne out by the TTC’s own numbers.  The actual values will vary from route to route and day to day, but the average is about 1/4 of this claimed value.  Indeed few of the services up for cancellation reach the $30/rider subsidy level as is evident on the updated and expanded spreadsheet.

The link to the table is reproduced here for convenience.

2011.03 Route Cuts Analyzed

In other news, I have now learned that the service improvements implemented in January 2011 are to be funded out of the savings from the late night cuts.  These improvements have an annual cost of about $4m, leaving only $3m for fall 2011.  However, about $1m will be lost to the delayed implementation of the cuts, leaving only about $2m for service additions in late 2011.

Updated January 13, 2011 at 3:05 pm:

Maps added:

Map of routes facing proposed cuts

Map of routes with proposed additional service (Fall 2011)

It is worth noting that some routes appear on both maps indicating that they have a proposed service cut in one period to pay for an improvement in another, although we don’t know exactly what that may be yet.

[The original article follows below.]

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TTC 2011 Capital Budget

TTC management unveiled its Capital Budget and 10-year forecast on January 12 with a presentation to the Commission, and followed up with a presentation at the City’s Budget Committee on January 14.

Online information about the budget is incomplete.  More troubling, however, the “Blue Books” which contain the details of all capital projects have not yet even been issued to members of the Commission, let alone Councillors or, it would appear, the City’s Budget Analyst who is supposed to digest all of this on Council’s behalf.  Full consideration of the TTC budgets was held over to January 20 by the Budget Committee to await the Analyst’s Notes.

TTC Capital Budget Report

Appendix A: Ten Year Summary

Appendix B: Sources of Funding

Appendix C: Project “Packages” For New Funding Requests

Presentation to City Budget Committee (See Pages 49-70)

Meanwhile, the TTC presented a budget with previously unknown major capital projects and additions to existing ones, but with little explanation of why they are here.

Oddly enough, the City’s Executive Committee only yesterday was in turmoil over unexpected increases in the cost of hosting the Pan Am Games due to unplanned costs for soil remediation and the fact that the project estimate was in 2008 dollars.

The TTC would do well to understand that surprises in budgeting will not be warmly greeted by the City, and moreover that they can have a compounding effect of squeezing available funding for other projects.

In this article, I will give an overview of major points in the budget along with specific comments on a few major issues.  When the “Blue Books” become available (expected later this week) and I get a chance to review the full budget, I will write on major topics such as subway fleet planning and system expansion in detail.

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TTC Operating Budget 2011 (Update 3)

This article provides additional details on the TTC’s 2011 Operating Budget including information in a presentation given at the January 12 meeting, but not available online.

Updated January 17, 2011 at 2:30 pm:

A table listing cost recoveries for Canadian transit systems has been added at the end of this article.

Updated January 15, 2011 at 10:30 am:

On January 14, the TTC made its presentation to the City’s Budget Committee.  The linked document covers all three budgets: operating, Wheel Trans and capital.

The budget information is reformatted into the standard layout for City departments and agencies starting at page 26.  A projection through 2012-13 on page 30 shows the estimated growth in revenue, expenses and subsidy requirements, and the effect of a fare freeze on total cost recovery.  (Note that the projections do not include the effect of cancelling the proposed 2011 fare increase.)

Much supporting detail that was included in the TTC’s own budget presentation on January 12 is not in this document.  The detailed presentation is still not available online.

I will comment on the Capital Budget in a separate article.

Updated January 14, 2011 at 9:45 am:

Information has been added to the “Cuts & Additions” section regarding the annual savings from proposed cuts and their value expressed on a per vehicle hour and per passenger basis.

[Original post from January 13 below]

Revenue/Cost Ratio

The TTC’s revenue/cost ratio continues to run well above that of other cities and for 2011 will be about 70%.  Farebox revenue for 2011 is budgeted to rise by about $53.5-million relative to the 2010 budget which underestimated ridership.  Actual farebox revenue for 2010 is expected to be $40m above budget and, therefore, almost 80% of the jump for 2011 is attributable to strong ridership in 2010.

Advertising revenue for 2011 is expected to rise from $15m in 2010 to $20m in 2011 as a direct result of the improving economy and stronger demand for ad space on transit vehicles.  This is an example of a revenue stream where the ebb and flow of income has a non-trivial effect on fare and subsidy debates, although it is rarely mentioned.

With a projected farebox revenue of $941.5m and expenses of $1,429.1m, the farebox will account for 65.88% of total expenses.  Other non-subsidy revenues will bring in $58.7m or 4.11% of the total.  The remaining 30.01% will come from city-funded operating subsidy.

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TTC Budget 2011: Service Cuts Definitely, Fare Increase Maybe (Update 6)

Updated January 12, 2011 at 5:30 pm: Today the TTC decided to defer the matter of the proposed service cuts to its meeting on February 2.  I will comment in more detail on both the Operating and Capital budget presentations that were made today (they are not available online).

Meanwhile, details of the service cuts are available.  A few notes about this table (which comes from the TTC):

  • Vehicle reductions:  This is the TTC’s estimate of how many vehicles will be saved, and these numbers won’t always be the same as in the table I produced because of assumptions about interlining.
  • Customers affected:  These are the people who now use the service.  Equivalent to “boardings” used in a calculation below.
  • Customers lost:  This is the TTC’s estimate of the riders who will be lost.  Generally this is much less than the number affected because the TTC assumes people will walk to another route rather than abandoning the system.
  • Boardings/service hour:  For some reason, this appears only for a subset of the cases shown, although you can calculate the values.  If the proposed cut is 2 vehicles for 3 hours, then this is 6 service hours.  Divide that into the number of people affected to get the boardings/hour.  The screenline for cuts is 15 (not 12 as previously reported) boardings/service hour.

The TTC has already noticed one “oops” — the Downsview Park bus on early Saturday evenings carries 267 riders in the three hours between 7 and 10 pm, or almost 90/hour.  Saturday daytime, it carries 176 in the 13 hours from 6 am to 7 pm, or 13.5/hour.  However, it is likely that a good deal of this riding is concentrated later in the day, and it will be easy to get over the screenline by taking this into account.

I will digest this chart with additional calculations in a post tomorrow.

The methodology has a certain prejudice depending on the type of route.  For example, very short routes tend to have a lot of turnover and rack up boardings quickly.  Long routes handle longer trips, and the resources used per boarding are proportionately greater.  This means that a long route has to have a higher average load to meet the boardings/hour criterion and escape cuts.

For routes that don’t do well, this is something of a moot point because they are never going to the cut, but this sort of systemic error in analysis becomes important if, in 2012, the bar is raised to cut more “unproductive” services.

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Service Cuts Coming in 2011? (Updated)

Updated January 6, 2011 at 7:00 pm:

CITY-TV reports that according to TTC Chair Karen Stintz, the City’s budget allocation for operating subsidy to the TTC will remain at the same level in 2011 as in 2010.  This would be an increase over actual spending in 2010 because the TTC ran a “surplus”, at least on paper.

From the Chief General Manager’s Report up to the end of October 2010 we know that the projected subsidy requirement was running about $60-million below the originally budgetted level.  Of the expected $430m subsidy, only about $370m would actually be needed.  Some of this “surplus” arises from better than expected riding and fare revenue, and partly from some operating cost savings that may not be repeatable (an unexpected dip in fuel cost, for example).

If the TTC had been required to take a 5% cut relative to budget levels, this would have meant a $21.5m cutback in subsidy, but since they actually only used $370m, they would still be ahead of the game.  Getting the whole $430m is a bonus.  However, the total TTC budget is about $1.37-billion, and a 5% increase would not be unexpected given the combined effect of wage, service and materials increases.  That would eat up roughly $64-million.

Stintz confirmed that there will be some service cuts in 2011.  One important budget pressure is the “Customer Service” file which will trigger new spending in many areas.  This is a challenge for the TTC and a delicate balancing act — if service gets worse, it will be hard to deliver that service with a smile.

The bigger challenge for the TTC and for Council is the multi-year view of budgets.  There won’t be a big “surplus” (actually underspending relative to budget) in coming years, and real dollars will have to be found either on the revenue or expense side of the ledger.  Council is supposed to be moving to multi-year budgeting, but there is not yet anything definitive on this nor on the effect for medium range transit policies.

As I write this, a special TTC meeting to deal with budget matters is rumoured for next week, but it has not yet been publicly announced.  The City Budget Launch meeting on Monday, January 10 may provide more details.

The original article from December 23, 2010, follows below.

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A Grand Plan: 2011 Edition

Back in the early days of this blog, I wrote a long paper about the role of transit and what a truly regional plan would look like.  To avoid extensively quoting myself, I suggest that any newcomers to this site read that as a starting point as it contains not just a list of routes, but a philosophy of how one should look at transit.

Since 2006, we have seen Transit City, MoveOntario2020 and The Big Move.  The GTA appeared well on its way to real progress in transit although problems, notably the question of local service funding, remained.

Now we have a new Mayor in Toronto, and plans that came from years of work and debate lie in pieces on the floor.  Metrolinx and Queen’s Park seem content to “plan” by carving up funding that’s already committed and redrawing their map to suit the whims of a new regime at City Hall.

The fundamental problem in this exercise is the phrase “funding that’s already committed”.  When you draw a map with a half empty pen, you make compromises, and you run out of ink leaving huge areas bereft of service.

If redraw we must, then let us do so with a view to a transit network and to a view beyond the end of next year.  What does Toronto and the GTA need?  How much will that cost?  How do we pay for it?  If we start with the premise that we cannot afford anything, we should stop wasting our time on planners, engineers and the myth that transit can actually transform travel for the next generation.

The discussion below is Toronto centric because this is a Toronto blog, and that’s where most of the GTA’s transit riders are.  All the same, the philosophy of what transit should be affects everyone, especially in those areas where so much transit growth is needed just to catch up with the population.

Some of the info here will be familiar to those who read my commentaries regularly, but I wanted to pull it all together as a starting point.  My comments are not intended as the one, definitive “solution”, but to show the need for debate on a large scale, integrating considerations from many parts of various schemes.

[While I was writing this article, the Pembina Institute published its own critique of the Ford transit plan.  I do not intend to comment on that document here because it addresses only one part of a much larger collection of transit issues.]

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Where’s My Stop? (Updated)

Updated December 28 at 11:45 am: I have received a note from Brad Ross at the TTC advising that there is an unspecified issue being worked out between the TTC and the supplier of the stop announcement system.  Once this is settled, the backlog of changes will be implemented.

This post is intended as a container for reports about inaccurate stop announcements.  Given the legal hassles the TTC went through about their implementation, it’s odd that they don’t bother to adjust the info in the GPS-based units when stops are moved.

I have relocated two comments about this from another thread to this one just to keep the info separate, and in the hope that someone at the TTC will actually read and act on this.

The single largest problem I have seen in years of watching TTC’s attempts at customer service is the complete lack of co-ordination between departments, and the concurrent lack of credible or accurate public information.

For example, there are still signs at Bloor-Yonge Station telling you that the subway doesn’t run north of there late at night, although the project that triggered this operation ended some time ago.  The line remains closed north of Eglinton for tunnel work, but south of Eglinton, the line is operating.

Other diversion notices remain in place months after they are obsolete.  Even if they contain an end date, a reader may not notice this, especially if they are unfamiliar with the system.  Construction notices acquire a layer of stickers telling us when projects will finish, some day, eventually.  At least they are now real printed notices, not hand-written (mostly).  And, yes, the elevator at the east end of Yonge Station is finally back in service.

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TTC Meeting Wrapup for December 15, 2010

[My apologies for the lateness of this post.  The last few days have seen a number of distractions and conflicts with blogging in my life, and I am just getting back to it “full time” now.]

The Commission meeting began with two unusual events.  One was a “motion without notice” by newly-minted Commissioner Palacio proposing that the Commission ask Queen’s Park to give the TTC “essential service” status.  (This was a procedural device requiring a 2/3 majority to permit for an “urgent” situation, although with the current Commission makeup, that sort of majority is easy to attain.)  After a brief debate and with only Commissioner Augimeri (the token non-Ford supporter on the Commission) opposed, the motion passed.  The “urgency” was caused by this item’s being up for debate on Council’s agenda for the following day based on a similar motion at Executive Committee earlier in the week.  I have commented on this issue separately.

The other event was an inaugural address by the new Chair, Karen Stintz.  (See Chair Stintz’ blog and scroll down to “My Priorities as TTC Chair”.)  There are four main aims, none of which is worked out in much detail.

  • Sharpen the client focus.  A troubling note here is that “clients” is read to include “funders”, and getting value for money is considered a matter of customer satisfaction.  I agree, although probably not as Chair Stintz would like, from the point of view that money well managed and spent can give us more and better service.  This runs headlong into the next point …
  • Realign transit expansion plans.  Chair Stintz takes the Ford party line that voters want underground transit, although she also wants to stay in line with the regional view of Metrolinx and the funding of state of good repair projects.  Voters may want underground transit, but whether we can afford it or need it in the larger context is quite another matter.
  • Invest every dollar wisely.  If I comment on this, I will start to repeat myself.
  • Embrace new ways of doing business.  This point is rather vague and the only concrete proposal is a change in the Commission’s composition.  The real problem, as we have discussed at length on this site before, is the question of who would be “qualified” and “appropriate” to sit on the TTC board, what their agendas might be, and which masters they really served.

I wish Chair Stintz well in a very difficult role in difficult times.  The TTC and the transit system is a large, complex organization, and its effect on the City of Toronto is greater and more long-lasting than most other agencies Councillors direct.  Collisions between being “pro transit” and being part of “Team Ford” are likely to come as soon as the 2011 budget process, and certainly as Council begins to look at planning for 2012 and beyond.

Union Station Second Platform & Concourse Improvements

This report, authorizing a contract for the construction work on this project, was approved, but not until after considerable questioning by Commissioner Minnan-Wong who is greatly perturbed by the increasing cost of the project.  How did it get from $90-million to $137m (not including work funded from various TTC facility improvement lines in the Capital Budget), and who was paying for the added cost?

The project is funded primarily by Waterfront Toronto which, in turn, has a nest egg contributed by the City, Queen’s Park and Ottawa in equal measure.  WFT agreed to fund the increased cost, and the money was redirected from the cancelled Front Street Extension project.  The cost increase comes mainly from changes in the design to accommodate the City’s own Union Station project as well as the complexity of rebuilding a major subway station while it remains in operation.

The project gets underway in January 2011.

Ashbridge’s Bay Maintenance Facility

This topic was the subject of several deputations by members of the Community and by area Councillors, as well as some debate among the Commissioners.  The primary issues raised were:

  • Why was the cost of site preparation not included in the original project budget?
  • Are there other properties owned by the TTC or by City agencies that could be used either in place of the proposed Ashbridge’s Bay site, or that could allow the TTC to shuffle existing uses among sites to free up space for the new streetcar yard elsewhere?
  • Is the land that would be used for the new facility needed for future expansion of the sewage treatment plant next door?

A few points are worth noting.

  • Any change in site would require a new Transit Project Assessment that would take the better part of a year to complete.
  • A site in New Toronto owned by the City’s agency Build Toronto was previously rejected by the TTC as being too small, although at 24 acres it exceeds the property requirements for a new facility.  The real issue here may be that Build Toronto hopes to reap $50-million from the site, considerably more than they would be paid, if anything, by the TTC.
  • The Lever site south of Eastern Avenue near Broadview was previously rejected for being partly unavailable, but that condition no longer applies.
  • The need for expanding the sewage treatment plant had been ruled out during the study for the Ashbridge’s Bay site, but in any event would require taking of the existing open space and berm which some local residents are defending against the TTC project.
  • The scope of work planned for existing carhouses keeps changing.  For example, a proposed expansion of Russell Carhouse to be used as a temporary facility for work on the prototype streetcars, and later as a major collision repair shops, has been dropped.  This work will now be done at Hillcrest in the bays used for maintaining the articulated streetcars (ALRVs).

TTC management will report back on these issues early in 2011.

Again, the question of project budgeting came up.  There is a still unsettled battle between TTC and City finance staff about whether the TTC can spend money on a project whose scope and cost have changed without first obtaining Council approval.  Because the TTC board delayed action on awarding this contract, the issue has not yet come to a head, but may do as part of the 2011 budget process.  A revised project scope for this facility will be included in the overall Capital Budget and this may, or may not, attract attention.  As I understand current Council policy, only if the revised scope is approved by Council through an updated budget would the TTC actually have the authority to proceed.

New Overhead Facility Lease

As I mentioned in the preview of this meeting’s agenda, management recommended that the Commission relocate its overhead maintenance crew to new quarters to be leased for five years.  This will allow for expansion of the crew to undertake major reconstruction of the streetcar overhead infrastructure.

This report was approved without comment.

Post Secondary Student Metropasses

A large crowd of students demonstrated on Nathan Phillips Square before the TTC meeting, and they moved into the Committee Room to support speakers on this issue.

The Commission decided that students in Private Career Colleges who have full time programs (defined as 20 or more hours/week) would be eligible for student metropass pricing.  This will come into effect probably for February 2011.  Other groups, notably students at Community Colleges, will be the subject of a separate report early in the new year.

Most interesting about this issue was the fact that the Commission made no attempt to dismiss the request on the grounds of budget constraints or equity with other riders.  This particular room full of students got an uncharacteristically warm reception from an agency whose usual response to requests for subsidies is “go elsewhere”.  The Commission (partly in their other role as Councillors) is spending the “surplus” in the TTC budget even though this may not last into 2011.  The presence of a well-known former politician as the legal counsel government relations consultant for the Ontario Association of Career Colleges may have had something to do with the success of this student appeal.

Transit Service Variety Village

After an impassioned deputation by Councillor Crawford, one of the new faces at City Council, and a staff presentation outlining the problems involved and the options available to serve Variety Village, the Commission decided to go forward with a staff proposal to increase the hours of service on the Variety Village Community Link bus so that instead of ending at 7:00 pm, the service will run until 10:00 pm.  Moreover, the frequency will be improved from hourly to half-hourly.  Both changes take effect in January 2011.

Unknown to most would-be riders, this service is available to any transit rider, not just to Wheel Trans users.  The combination of longer hours and better service are expected to improve riding on this route.  A report on the success of the improved service and on alternative ways to serve Variety Village will come forward no later than June 2011 with the intention that any changes would be implemented in September.

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How Essential is the TTC?

In the past week, the TTC board and City Council have voted to ask the Ontario government to make the TTC an “essential service”.  During the debate, this action was opposed by both the TTC’s management and union on the grounds that this will only complicate labour negotiations.  Issues will go to arbitration that might otherwise be bargained between the parties, and costs will increase through the typically higher wage settlements granted to workers who do not have the right to strike.

Those who favoured essential service status argued that this is, de facto, the way things work anyhow.  When a transit strike occurs, it takes a few days, but the machinery of back-to-work legislation doesn’t take long to restore service.  Why, then, endure the upheaval of a short work stoppage if legislated arbitration will be the result?

This is an attractive argument, except when one looks at the context.  Toronto Council and the Mayor’s office has changed from the most pro-labour group any union could expect to see to an administration that makes little secret of its will to reduce the influence and effect of organized labour in Toronto.  Got a problem with garbage workers?  Privatize the service.  Got a problem with transit workers?  Make them “essential”.

Such actions may satisfy the urge to show the unions who is boss at City Hall, but they may not be the best policy for the city.

There is no question that the civic workers’ strike of 2009 was a turning point in Toronto politics.  Not only was it a lengthy strike, but one which saw contentious relations between union members and the very people — the voters — those members needed to gain political support for their position.  They failed miserably.  Much was written about who “won” the strike, and the union managed to convince everyone that they came out on top even though they conceded on the key issue of future sick benefit payouts.  The problem, at the end, was that voters endured a strike that seemed to have solved little (although the outgoing administration and city finance officials will tell you differently), and the voters were fed up.

Stir into this the wide perception that TTC workers are at odds with the people they serve.  The “sleeping collector” front page [RIP] was not the Toronto Sun’s finest moment, but the photo and the anti-union sentiment it provoked cut right across the city.  Relations between TTC staff and riders took on an “us vs them” feel that has reduced somewhat, but they remain less than ideal.  Some operators, a few, really are jerks.  Stories of buses held hostage while an operator claims harassment by a passenger still crop up.

Service on the street isn’t what it might be.  We can always use more buses and streetcars, but there are enough cases of operators fouling up service that this minority can easily be blamed for many service problems.

All that said, making the TTC an “essential service” won’t improve manners among the rotten apples, and won’t make the Queen car or the Dufferin bus run on time.  That takes an organizational will to provide service that’s as good as possible rather than always blaming problems on someone or something else.

The TTC and its new Chair, Councillor Karen Stintz, hopes to make Customer Service a top priority in the coming term.  The TTC must regard its customers as vital, its raison-d’être, not as pesky travellers who need to be taught how to behave properly on transit vehicles.  This is a question of attitude, not of labour negotiations.  Indeed, the organizational culture isn’t only on one side of the bargaining table.

Finally, the problem will land back in Council’s lap with the inevitable call for better transit funding, if only to keep up with inflation, system growth and the inevitable wage increases arbitration will bring.  How “essential” will transit be then?

The opportunity for a vindictive attack on transit workers and labour relations was probably the most “essential” part of this whole affair.  The new regime had a chance for chest-beating and a quick win that will probably do little, on balance, to improve transit.

In coming months, we will hear budget debates at the TTC and at Council.  Those who worship the holy grail of tax cuts will give long speeches about efficiency and belt-tightening, about how riders will have to make do with less service and higher fares, about how “the taxpayers” (as if they are not also transit users themselves) cannot be expected to bear a greater burden.

If transit really is essential to the economic health of Toronto, then Council must be prepared to spend and spend generously on this service as an investment in the city’s future.  We will see just how “essential” transit is to our new Council when the bills come due.

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TTC Meeting Preview — December 2010 (Updated)

Updated Dec. 11, 2010 at 2:20 pm: The section on the site remediation report for the proposed Ashbridges Bay carhouse has been updated to reflect a June 2010 report on a possible alternative site near Broadview and Eastern.

Original article from Dec. 10, 2010:

The new Toronto Transit Commission dominated by political supporters of Mayor Ford will hold its first substantive meeting on December 15, 2010.  Among items of interest on the agenda are:

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