What Should We Do With $47-million?

In a breathtaking display of political opportunism, mayoral candidate (and former TTC Chair) Karen Stintz attempted to highjack an unexpected “surplus” from 2013 transit operations to pay for a fare freeze in 2015. This move was not derailed, but at least shunted into a siding by an alternative proposal from the current Chair Maria Augimeri. How did we get from a TTC that is desperate to make ends meet to one that can glibly talk about avoiding a fare increase, conveniently in the run-up to an election?

The May 28 TTC meeting agenda included the audited financial statements for 2013 and a report on the unexpected drop in the subsidy requirement for last year’s operations.

The subsidy requirement was much lower than the budget projection because of one-time changes that benefited the TTC:

  • liabilities for Workplace Safety & Insurance Benefits and the Long Term Disability plan were reduced by $6.3-million;
  • various expenses including depreciation, allocation of costs between the operating and capital budgets, accident claims payouts and retroactive pay were below budget by about $18m;
  • variations in non-labour costs netted out to a saving of $16m relative to budget.

Add in the previously reported $7.3m surplus, and collectively, the subsidy needed by the conventional TTC system was $46m below budget, and Wheel Trans was down $1.7m.

Council’s policy dictates that when the TTC has a “surplus” (i.e. the subsidy requirement comes in lower than expected), the money stays with the city and is allocated mainly to capital accounts, including the large backlog of funding needed for TTC’s 10-year capital program. For 2013, the city’s current plans are to allocate any surplus:

  • 75% to the shortfall in TTC capital funding, and
  • 25% to fund TTC post-retirement benefits and and accident claims long-term liabilities.

(Although the TTC budgets for long-term liabilities in the year they are incurred, the city does not pay out the money through subsidies until the money is actually needed by the TTC. This keeps the working capital in city hands, and the future payouts are funded, if possible, from “found money” like the TTC “surplus” rather than from current revenues. From the TTC’s point of view, they are an “account receivable”.)

Stintz proposed that the TTC ask Council to approve that the money would stay in TTC hands and be used to avoid a fare increase in 2015. Riders have put up with a lot with service problems, and they deserve a reward, indeed they should get some of “their” money back, she argued.

Not only is this an unvarnished election ploy, but it runs directly contrary to positions Stintz has taken at the TTC and at Council.

  • The money is a “one time” windfall from better-than-expected conditions, and there is no guarantee that the TTC will perform similarly in 2014 and beyond. Indeed they are already short thanks to lower ridership and the brutal winter just past.
  • In both public and private sector finance the unfunded liabilities for future unavoidable costs such as pensions, benefits, and accident claims are a serious problem, and it is city policy to reduce its exposure to them.
  • Council debates over budgets repeatedly focus on the difference between “sustainable” and “unsustainable” funding practices. If City revenue is up, and this can reasonably be expected to continue in future years, then this is “sustainable”. The same is true for expense reductions that are permanent, not one-time blips. As part of “team Ford”, Stintz was quite insistent on the need for the City to avoid “unsustainable” funding strategies.
  • Stintz herself pushed and defended cuts to service quality both in hours of service and in crowding standards. These changes also led to the removal of a 150-bus order and the deferal of a new garage project in the Capital Budget. All of this was “for the greater good” of the transit system according to Stintz. Now, rather than improving service, she would rather hobble TTC’s revenue stream with a fare freeze.
  • Chair Augimeri attempted to get a motion through the TTC Board in April 2014 asking staff to report on service improvements to the June meeting with a view to including these proposals in the 2015 budget process. This motion was sidetracked by the Stintz faction on the Board who viewed it as an attempt to support her rival Olivia Chow. Staff will still do the work, but the due date is now conveniently beyond the election. Suddenly, with $47m in her pocket, Stintz wants a fare freeze.

During the debate, the question of creating a stabilization fund came up — “profits” from one year would go into a reserve to offset “losses” in another. This is a bit of accounting trickery because, of course, there is no “profit”, only a reduced subsidy requirement.

Nobody at the meeting, including the TTC’s own finance management, bothered to mention that such a fund already exists. It is listed in Note 17 to the financial statements on page 37 (page 41 of the PDF), and the account held $24.666m at yearend 2013. Oddly enough, during the 2014 budget debates, nobody talked about using this to lower fares or improve service for the obvious reason that the reserve is intended to deal with one-time events, and cannot provide “sustainable” funding for anything.

One member of the Board, Al Heisey, asked why there has been no debate on priorities for any spending of this type with a view either to service improvements or capital projects such as buying buses. This is part of a more general malaise at the TTC where broad policy objectives are not discussed by the Board. This is quite a change from the days of Chair Giambrone whose activist term routinely spawned many policy discussion through requests to staff for discussion papers that came to the public TTC agenda.

It is ironic that the city policy (keeping back any “surplus” from the TTC) arose in part due to Giambrone’s activism. If the money stayed in the TTC’s hands, it could be used to launch new programs without an explicit Council authorization. There was no guarantee against one-time “surplus” money funding a change that would require long-term subsidy funding in future years by Council. Stintz was trying to pull off precisely the type of funding trickery that Council spiked when it stopped putting TTC surpluses in the stabilization reserve.

In the end, the Board moved to ask the city to treat its budgets on a five-year basis so that a surplus from one year could be carried over and used to fund shortfalls the next. Whether the $47m will actually limit a fare increase, or even stay with the TTC, will be a decision for the new Council, one that, if polls are to be believed, will certainly not include Karen Stintz.

So You Want To Own A Subway …

November 25, 2017: As the Tories have trotted out the same uploading plan as in the last election, I’m reminding folks that their scheme simply does not hold water. The numbers here are from 2014, and in due course I might getting around to updating them with 2017 or 2018 data. But it won’t change the conclusions.

This article was originally published in May 2014.

The madness that passes for political policy in Toronto continues in the provincial election with a proposal that a Tory administration under Tim Hudak would transfer control of the rapid transit system to GO Transit as a regional asset. The conventional wisdom is that the subway on its own would be “profitable”, and that Toronto would be stiffed for the money-losing surface network.

Quite bluntly, any claim that the subway makes a profit and could be uploaded at no net cost to Queen’s Park is pure bunk, and it says something about the quality of Hudak’s advisors that they don’t seem to know this (among many other fiscal facts of life). Just like the operation of a house or a car, two things many voters must deal with day-to-day, there are two budgets:

  • Operating: Here we have the bills that roll in regularly such as taxes, utilities, insurance. Unless we are renting out our homes or vehicles, there is no offsetting revenue, but in the case of the subway, there are fares and other much smaller sources of income.
  • Capital: Now and then, major expenses come along such as a new roof or foundation repairs, a new furnace or other appliances, fixing the plumbing and electrics, building that nice new patio you always wanted. These don’t happen often, and the expense covers an asset that should last decades, but some level of capital spending is unavoidable.

I have omitted mortgage costs here because they do not have a direct equivalent in transit budgets where the cost of borrowed money is not visible. If this were included, then capital-intensive modes like the subway would have a higher operating cost with the debt service charges included.

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John Tory’s Mythical Subway

I think people forget, for example, that we have to rebuild the LRT in 25 or 30 years, just like we have to with the Scarborough RT. With a subway we won’t have to do that. The Yonge Street subway just celebrated its 60th anniversary and it’s still in good shape.

[John Tory in an interview for Metro News, April 7, 2014, courtesy of Matt Elliott]

The false comparison of long-lasting subway with a comparatively short-lived LRT is the sort of comment I expect to hear from (former TTC Chair and Mayoral candidate) Karen Stintz, or from the subway-loving Brothers Ford.  The number “100” is often bandied about as the longevity of a subway investment by analogy to the much older networks found in cities like New York, London and Paris.

I have written before about this and won’t belabour the details here, but now that a major candidate for the office of Mayor has taken up the line, it’s worth revisiting the topic.

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Toronto Deserves Better Transit Service Now! Part 3

In previous articles, I wrote about the decline in transit service thanks to the budget cutbacks of the Ford/Stintz regime, and about the potential for short term improvements.

This article looks at improvements in more detail in light of a recent policy announcement by Mayoral candidate Olivia Chow that she would increase service by 10% to reduce crowding.

What would a service increase look like “on the ground”, and what resources would it require?

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When is “LRT” not LRT?

In all the debates about transit options, be they in Scarborough or elsewhere, one of the most abused and frequently misunderstood terms is “LRT”.

The term appears in various contexts over the years under both the guise “Light Rail Transit” and “Light Rapid Transit”.  The difference can be more in local preference including marketing aims.

One can even find “LRRT” where a proposal tries to be all things to be all people.  The Buffalo line, which incongruously runs on the surface downtown, but in a tunnel elsewhere, originally used this term, but was rebranded “Metro Rail”.  The “LRRT” term, however, is still in current use as a Google search will demonstrate.

The term “Light” contrasts “LRT” with systems that require more substantial (or “heavy”) infrastructure such as:

  • mainline railways including commuter rail operations such as GO,
  • “subways” as the term is used in Toronto (with other words such as “Metro” and “Tube” found in other cities),
  • any technology requiring a dedicated, segregated guideway and stations either because of automated control systems or because the right-of-way cannot be crossed for various reasons.

Life gets very confusing because there are overlaps between technologies and their implementation.  One of the oldest streetcar systems in North America, Boston’s, exhibits every conceivable type of operation with the same vehicles running in mixed traffic (little of this remains on the network), on reserved lanes in street medians, on private rights-of-way that run “cross country” relative to the road network, on elevated structures, and in tunnels just like a subway.  (The “Blue Line” running under the Boston harbour was originally a streetcar tunnel, but was converted to “subway” operation in the 1920s.)

The Boston Green Line is the oldest subway on the continent, and it runs with “streetcars” that morph into “light rail vehicles” not because of magic performed where they leave the street pavement, but because of the way the vehicles are used.  This is central to the concept of “LRT” – the ability to operate in many environments as appropriate to demand and local circumstance.

Unlike what Toronto calls a “subway”, an LRT network can adapt to its surroundings and this is a fundamental characteristic of the mode.  The original Scarborough LRT would have run at grade with some road crossings enroute, and a Malvern extension was on the books, but never built.

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Full Disclosure & An Open Door

For the benefit of readers and those working on various election campaigns:

Since the municipal campaign began earlier this year, I have been approached by a few candidates and/or by their organizations for my thoughts on transit issues.  All of this has been on a pro bono basis.  I am not working for any of the campaigns, nor do I intend to take up that role.  My aim is to improve the quality and “literacy” of discussions about transit issues.  Whether the candidates or their teams agree or incorporate my thoughts is their own matter.

It is far to early in the campaign to even think about endorsements, and if I make any, this will be much closer to voting day when the candidates and their platforms have been tested by several months of campaigns and scrutiny.  The readership here is not huge, and the idea that I could sway a significant voting block is laughable.  My personal voting preferences will be based on more than just the transit file, but this site is not a place for discussion of issues from municipal portfolios beyond transportation.

As transit issues develop in the campaign, I will write about them here, although I do not intend to rehash the entire Scarborough subway/LRT debate beyond clarifications or challenges to misleading information.  Frankly there are more important matters to talk about, and a pro-transit candidate should not make this the sole plank of their platform however they stand on the question.

My door, so to speak, is open to those who want to talk about transit, although I suspect certain candidates won’t be calling.

How Long Would The Scarborough LRT Construction Require?

With the emergence of two candidates for Mayor of Toronto who support the Scarborough LRT scheme, we are bound to hear much talk about how long construction would take, how long SRT riders would be forced to ride shuttle buses, and when the line might open.  In this context, it’s worth looking back at Metrolinx plans before various politicians decided to buy votes in Scarborough with a subway line.

The TTC’s original plans were to rebuild the SRT before the Pan Am Games. That schedule went out the window when then-Premier McGuinty pushed out the delivery plans for the Transit City projects so that most of the spending would occur after the provincial deficit was under control if not eliminated.

Also lost in the shuffle was the idea that the Sheppard LRT would be in operation before the SRT shutdown as an alternate route for people from northern Scarborough to reach the subway system.

Metrolinx revised timelines were based on three overlapping stages of the project:

  • Build the new maintenance shops at Conlins Road including pre-building a portion of the Sheppard LRT for use as a test track.  (This portion would be part of the link to the future Scarborough line and would be needed even if the Sheppard line were not yet operating.)
  • Build the north end of the Scarborough LRT line from Sheppard to a point just east of McCowan Yard.
  • Rebuild the existing SRT as an LRT line.  Only this part of the project would require a shutdown of SRT service.

As momentum grew for the subway proposal, it suited proponents to treat the entire project timeline as the shutdown period for the SRT, and thus we began to hear of a four-year long period when riders would be taking bus shuttles.  The situation was not helped by the fact that Queen’s Park and Metrolinx talked of the Scarborough LRT opening “by 2020” even though it could be finished far earlier.

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Toronto Deserves Better Transit Service Now! Part 2: What Can Be Done

The first part of this article reviewed the evolution of transit service and riding since 2006. In brief:

  • System riding grew by about 22% from 2006 to the projected demand in 2014.
  • The bus fleet, after increasing by about 22% early in that period in part for the Ridership Growth Strategy (RGS), has not grown since 2009.
  • The capacity of the bus fleet has dropped by about 6% as the remaining high-floor fleet was replaced with low-floor buses.
  • Although RGS improved crowding standards to encourage more riding, these changes were reversed in 2012 to fit more passengers on existing vehicles.
  • The streetcar fleet size has not changed at all, and peak service improvements, such as there were any, came from redeploying vehicles from routes shut down for construction projects.

Changing the level of TTC service on a broad scale is not something anyone can do overnight.  More service means more buses and streetcars, more operators and more garage capacity.  All of this takes more operating and capital subsidy, and a sustained commitment that lasts longer than a campaign sound-bite.

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Toronto Deserves Better Transit Service Now! Part 1: Evolution of Service from 2006 to 2014 (Updated)

Updated March 10, 2014 at 2:55 pm:  A section has been added with a chart tracking the evolution of budgeted hours of service from 2006 to 2014 showing the effect of revisions, especially those occasioned by the Ford-Stintz cutbacks, and the recent growth of service thanks to carry-overs of “surpluses” in subsidy levels.

Originally published on March 9, 2014 at 8:00 am.

In the coming municipal election campaign, there will be claims and counterclaims about transit service – how much do we have, did it get better or worse, who should be praised or blamed for the changes.

This article reviews the quantity of service offered on surface routes measured by the number of vehicles on the road during various periods. The data shown are, with one exception, for January in each year to give comparable operating and demand conditions for scheduling purposes.  (The exception is for 2008 where I only have the February information in my archives.  Typically there are few changes between the January and February levels of service.)

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