$33 Billion and Counting (Part II)

In the first article in this series, I reviewed the Capital Budget and Plan that covers the years 2019-2033 for the TTC. There are three reports on the January 24 Board agenda related to this subject:

This article concentrates on the “Making Headway” report which is a glossy overview of the 15 Year Capital Plan. It is a generally good report, although there are annoying omissions of detail that would flesh out its argument.

This report deals mainly with “state of good repair” (SOGR) projects that involve rejuvenation of existing infrastructure and expansion necessary to handle growing demand. New lines are not, for the most part, included in the report although plans for them are reflected in SOGR planning where they trigger expansion of existing capacity. Leaving out new projects like the Richmond Hill extension may be a political decision, but this means that the context for some recommendations is incomplete. A useful update would be to produce a consolidated plan showing the “new” projects and the time-critical events they trigger (such as fleet expansion or replacement and station capacity issues).

For many years, the TTC, the City of Toronto and its so-called funding partners have been content for the official SOGR backlog to stay out of sight. This has the triple benefit of reducing the projected borrowing TTC projects will require, making the benefit of capital funding the TTC does receive (mainly from gas tax) appear larger than what is needed, and avoiding difficult questions about spending on new projects in the face of a gaping hole for existing maintenance. This must stop, and the “Making Headway” report certainly puts the TTC’s needs in a different, and far more critical, light.

A backlog of deferred maintenance has grown, putting the safety, accessibility and sustainability of our transit system at risk despite the need to move more customers more reliably than ever before. [p. 7]

One cannot help remembering the soothing words of TTC management in the early 1990s when recession-starved governments cut back on transit maintenance, and the TTC said they could get by on the money they received without compromising the system. Then there was the fatal crash at Russell Hill and, bit by bit, Toronto learned just how badly the TTC’s condition had fallen. The CEO at the time (a position then called “Chief General Manager”) went on to become a Minister in the Harris government that slashed provincial transit funding completely. Things appear to be different today with the TTC calling out for better funding, although at a time when the last thing any politician wants to hear is a plea for more spending.

One page should be burned into the souls of anyone who claims to support transit’s vital role:

It is easy for the need to invest in our base transit system to be overshadowed by the need to fund transit expansion. But investing to properly maintain and increase the capacity of our current system is arguably even more important.

Population growth and planned transit expansion projects such as SmartTrack, the Relief Line South, the Line 2 East Extension to Scarborough and new LRT lines on Eglinton and Finch West will add hundreds of thousands more customers to Toronto’s transit network.

The result will dramatically increase pressure on a system already grappling with an aging fleet, outdated signals on key subway lines, inadequate maintenance and storage capacity, and tracks and infrastructure in need of constant repair.

Without the investments outlined in this Plan, service reliability and crowding will worsen, as the maintenance backlog grows and becomes more difficult and costlier to fix. This is the fate now faced by some other major transit systems in North America that allowed their assets to badly deteriorate.

Our customers, our city, our province and our nation can’t afford to let that happen. [p. 8]

This is not the message recent and current leaders in Toronto and Ontario wanted to hear, and they collectively are to blame for the mess we are in today.

Although some items, particularly those in the second decade of the plan, are not fully costed, the items are included to raise awareness that they exist.

Given the scale of the investment required, however, it would be irresponsible to delay conversations about funding until estimates are exact. [p. 9]

There is a mythology about transit assets, particularly subways, that they last a century. This is nowhere near the truth, and those who push such claims as a justification for subways as a preferred mode are flat out liars. Only the physical structure lasts many decades, and even that requires ongoing repair. Components such as trains, track, escalators, electrical systems, signals, tunnels, pumps and station buildings require repair and replacement at regular intervals. The Yonge subway, now over 60 years old, is on its third set of trains, and the Bloor-Danforth line on its second. All of the track has been replaced two or three times. Stations do not have their original escalators, and the ones now in place are coming due for major overhaul or replacement. The list is endless. A subway is not a “build it and forget it” project any more than a new car or a new house.

When the existing system is asked to carry far more riders, more is needed than a new coat of paint. More trains and bigger stations are just a start, and the analogy would be trading up to a family SUV or moving to a bigger house. If Toronto were a stagnant city with little population or job growth, this would be less of an issue, but Toronto is instead a booming area facing problems of growth it cannot serve or chooses not to serve adequately.

The chart below shows how many aspects of a transit system are linked together. We cannot simply say “buy more buses” or “run more trains” and think that every problem is solved. This problem is compounded when any “improvement” we make vanishes into the black hole of deferred maintenance, making up for what we should have done years ago.

Seen from a high level, the $33.5 billion plan breaks down like this:

Of the “funded” portion, about one third depends on assumptions regarding available funds from various sources in the second decade of the plan, and the remainder is based on the current known commitments of various government. This is less than certain with provincial plans to take over ownership of the subway system and responsibility for funding its capital maintenance. Note that in the chart above, 65% of the total is subway related. This would leave Queen’s Park on the hook for $22 billion over 15 years, and that does not pay for system expansion.

(For clarity, some of the spending included above is on works in progress such as the ATC signalling on Line 1 YUS, and the delivery of new streetcars. Only the costs in 2019 and forward are included in the figures here.)

Funding vs Financing

This report deals with the funding needs of the transit system. The distinction is often blurred between getting the money (funding) and paying for it (financing). The distinction is that if you buy a car, somebody (you, or more likely your bank) pays for the vehicle. The dealer and the automaker are happy, but you now have a debt. That’s “financing”. A slightly more creative scheme would be for you to rent the car so that someone else (a leasing company) actually owns it, but this is still “financing”. Real money changed hands somewhere, although the leasing company would get a better price on a fleet purchase, and they have tax write-off opportunities that you probably don’t.

Money could come from outside investors who may simply provide financing secured by future revenues (taxes on new development, for example), or might build or buy and even operate assets on our behalf. But one way or another, we have to pay for them unless new money with no strings attached appears out of thin air. That’s how one-time grants for major projects like subway extensions work. Governments give the TTC money with which to build new lines, but the cost stays on the government’s books and is not a future charge against the transit system. That’s a system the province doesn’t like one bit, and that is why Ontario wants to own and finance projects if only because the accounting looks better without that “gift” to Toronto.

There is a great debate over where we will find $33.5 billion, but there is no way to make that number vanish short of simply not undertaking the projects it will fund.

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$33 Billion and Counting

A political tremour ran through the transit world in Toronto recently with the TTC’s release of a 15-year projection of capital spending requirements at $33.5 billion. This does not include funding for most system expansion projects beyond the already-approved Scarborough Subway.

That number is big, but it’s no surprise to those who have been following TTC budgets for years. A major issue has been that “unfunded” or “below the line” projects don’t get the attention they deserve and are deliberately kept off of the books to reduce the apparent size of the City’s financial problems. Common tactics included omitting projects from the overall budget, or projecting their spending in a period just beyond the rolling ten-year horizon of capital planning.

Transit planning in Toronto and at Queen’s Park is reckless when it downplays the backlog of spending and associated subsidies facing public agencies. New spending and the inevitable photo ops for grinning, back-patting politicians are easier to fit into plans when you can ignore the transit system crumbling in the background.

Several budget reports will be before the TTC Board (and later at City Council) at its next meeting on January 24, 2019.

There is far too much material here to review in a single article, and so I will break this up over multiple posts. Some of the details behind individual projects will not be available until I obtain the full version of the Capital Budget known as the “Blue Books” which expand the line items from the “Blue Pages” into project descriptions and schedules.

A vital part of the new reports is a shift to a longer time frame (15 years) and the inclusion of all projects in the Capital Plan whether they have funding or not. The extent of the problem is quite evident in the following chart. The purple hatched area shows the requirements for coming years while the sold areas show known funding amounts in the medium term and hoped-for income thereafter.

The big drop in the City’s funding share in the early 2020s arises from the lack of borrowing headroom in the overall City budget. A big problem here is the crowding by major projects such as the Scarborough Subway Extension and the Gardiner Expressway rebuild within the overall borrowing plan. Current City policy dictates that the average debt servicing cost should not exceed 15% of City tax revenue over a ten year period. Planned spending in the next few years will eliminate the headroom for additional borrowing. This exactly coincides with the bulge in TTC capital requirements beginning in 2022. To put it another way, if funding continued at 2019 levels across the chart, there would still be a shortfall, but against a much higher base.

Even this chart does not tell the full story because the Capital Plan continues to push major projects beyond the ten-year line, and the financial pressures from system expansion are not fully accounted for here. As things stand today, less than 30% of the ten-year program is funded. Beyond 2028, the level of assumed funding is still well below historical levels.

($ billion) 2019-2028 2029-2033 Total 2019-2033
Funded $6.4 $3.4 $9.8
Unfunded $17.5 $6.2 $23.7
Total $23.9 $9.6 $33.5

System expansion projects will add a further $3.8 billion over the first ten years of the plan:

  • Line 2 Extension (formerly known as the SSE): $3.4 billion (subject to revision when an updated cost report is presented to Council in April 2019).
    • “While the 10-Year Capital Plan includes $3.360 billion in funding for this project (between 2019 to 2028), this project has an overall budget of $3.560 billion. This estimate, which includes $132 million to extend the life of the SRT until the Line 2 East Extension commences operation and a further $123 million to decommission and demolish the SRT, was based on 0% design. The project budget and schedule will be re-baselined in Stage Gate 3 report to City Council in April 2019, factoring in delivery strategy and schedule risk analysis.”
  • Relief Line South: $385 million will be spent in 2019-20 to support early works on this project. Some of this is already funded, but $325 million is being advanced into the current ten-year budget. Of this, the City proposes to provide half and looks to other levels of government for a contribution. The actual RL construction project is a separate entity which is not yet in the budget.
    • “The 10-Year Capital Plan includes funding of $385 million to complete current work only, which includes completing the preliminary design and engineering to between 15% and 30% complete, including developing a project budget and schedule.”
  • Waterfront Transit: The ten-year budget includes only $27 million in 2019-21 for design work on the planned extension from Exhibition Loop to the Dufferin Gate. Design work on any other Waterfront projects, let alone any construction, remains beyond the ten-year window.
  • Spadina Vaughan extension: Outstanding work on this project including close-out costs amount to $60 million in 2019, but this will be funded within the existing project.

[Quotations above are from the 15 Year Capital Investment Plan and 2019-2028 Budget, pp 12-13.]

The Relief Line work includes tasks such as property acquisition, utility relocation and design for the tunnel boring equipment. Now that the line has political support, spending sooner rather than later is on the agenda, and about two years can be shaved from the original project schedule by doing the preliminary work now. This is a major change from the position taken by Mayor Tory during the election campaign, and the need to “do something” as soon as possible is now evident.

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TTC Board Meeting: January 10, 2019

The January 10 meeting of the TTC Board was primarily an organizational one with introduction of new members, plus a few management presentations on Board responsibilities and an overview of the system today.

Alan Heisey was re-elected as Vice-Chair of the Board continuing a role he has held ever since May 2015. This position is earmarked for so-called “citizen members” who are not also Councillors.

Most Board members, speaking of why they wanted to be at the TTC, cited an interest in transit and its role, but one, Councillor Karygiannis, was quite brief in saying “Sheppard Subway”. It will be ironic if Premier Ford is successful in taking over subway planning and construction because this project will no longer be one for the TTC or City Council to approve or build. Subway parochialism is alive and well at the TTC.

The Board discussed revisions to its meeting procedure including a proposal from the Vice-Chair that public deputations be limited. Anyone wishing to speak on multiple agenda items would get only five minutes in total, not five minutes per item. The idea has been referred to staff for review. Because any change in the meeting procedure would amend a bylaw that must obtain Council approval, this cannot take effect immediately.

The idea arises from frustration with a few regular deputants who address multiple reports, sometimes contentiously. However, it would be a short step from this scheme to one in which organized groups were only given five minutes in total rather than for each member wishing to address the Board.

A related procedural problem is that some reports where debate and action should be the order of the day, notably the CEO’s regular update, are classified as “Information” items. This hogties not just public deputations who can speak only to reports where the Board will approve some action, but even Board members who cannot make motions. The very report which should be the focus of each month’s review of operations and plans is insulated from substantive debate, criticism and action by the Board which is supposed to provide strategic guidance and policy.

At a time when “transparency” is the watchword and the sense that governments and their agencies should listen more, not less, to the public, this is a counterproductive proposal. If TTC Board  members don’t want to hear deputations, they should get themselves appointed to the Metrolinx Board where self-congratulation is the primary order of business and pesky members of the public sit quietly in the gallery if they bother attending at all.

CEO Rick Leary presented a system overview “Advancing to the Next Level”. This goal will be a real challenge for the TTC where just making do with existing resources has hamstrung real growth and improvement on the transit system. This presentation contains substantial errors of fact about the degree to which service has improved from 2017 to 2018. As an introduction for the new Board, it implies that the past year has been better than actual experience. TTC management spends too much time “polishing their halos” and this gets in the way of substantive discussion about real system needs.

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Challenges Ahead For The 2019 TTC Board

January 10, 2019 brings the first meeting of a new TTC Board with a new crop of Councillors and a new Chair while, for now, three non-Council or “citizen” members carry over from 2018.

Jaye Robinson, formerly Chair of Toronto’s Public Works and Infrastructure, was appointed as the new Chair of the TTC replacing Josh Colle who did not stand for re-election. She will be joined by Councillors Brad Bradford, Shelley Carroll, Jim Karygiannis, Jennifer McKelvie, and Deputy Mayor Denzil Minnan-Wong. Of these, only Carroll and Minnan-Wong have sat on the TTC Board before, and two members, Bradford and McKelvie, are new to Council in this term. The geographic distribution of members is unusual in that none of them represents a ward west of Yonge Street.

Three citizen members remain pending a review of these appointments by Council: Alan Heisey (who was Vice-Chair in the previous term), Joanne De Laurentiis and Ron Lalonde.

The first meeting includes housekeeping activities of selecting a Vice-Chair (who must be picked from the citizen members) and setting up the Audit & Risk Management Committee. Two previous committees will be disbanded in the interest of reducing the call on Councillors’ time:

  • Human Resources and Labour Relations: The TTC is at the beginning of a four year labour contract and does not foresee the need for a standing committee to deal with these matters. Any related matters would be brought either to the full Board, or to a committee struck for the purpose.
  • Budget: Although the TTC had a Budget Committee in the past term, it hardly ever met. For the new term a two-member “Working Group” is proposed, and this means that any budget meetings will take place in private except when the finished product comes to the Board for approval.

Also on the agenda for January 10 are:

  • “Richard J. Leary, CEO will give a presentation to the Board about the TTC, its accomplishments, challenges, vision and next steps.” [This presentation is not yet online.]
  • “Brian M. Leck, TTC General Counsel and John O’Grady, Chief Safety Officer will give a presentation to the Board about Member Legal, Safety & Environmental Responsibilities.”

The legal background emphasizes the Board’s role in providing oversight, general direction and strategy, as opposed to micromanagement of the system. However, this does not make for a completely hands-off arrangement as the Board has specific responsibilities and liabilities under legislation notably relating to worker safety and the environment.

Sadly, there is no legislative requirement to ensure high quality transit service.

The Board will meet again on January 24 with a meatier agenda including the Capital and Operating budgets. They are both huge documents, and the Board is unlikely to understand how their components fit together.

With the increased workload for members of the 2019 Council, moves are afoot to trim agendas and shift decisions to lower levels. In the case of the TTC:

In order to manage the number of items being presented to the Board for consideration while simultaneously seeking opportunities to improve decision making efficiency, it is recommended that staff begin to review options where delegated authority from the Board to staff is feasible. [TTC Board Governance at p. 5]

Staff will report on this in the next few months, but it is important that changes do not stifle public debate and that new “policy” does not appear out of thin air from a delegated responsibility.

Important Board roles are strategic planning and oversight of management. For the past two terms, TTC Boards have been less than engaged with overall strategy and the potential future of transit in Toronto. There are the inevitable debates about a few subway lines, but the larger question of the TTC’s purpose goes unanswered. One might argue that Council (or at least the Mayor and his allies) don’t want ideas that will add to costs getting a full airing at the TTC.

The political direction might well be to limit growth in fares and subsidies, but this should not prevent the Board from engaging in “what if” discussions to gauge the possibilities and implications for service levels, fare structures and technology, and large scale planning for system growth and maintenance.

One past example of TTC advocacy was the August 2014 “Opportunities” report produced by former CEO Andy Byford and staff. It contained many proposals including the Two Hour Fare which has only recently been implemented. The 2018 Ridership Growth Strategy contains many principles, but is lighter on specifics.

We cannot, as a city, understand what transit might do if the agency and Board charged with this are content to avoid discussions of what transit could be if only we had the will to pursue a more aggressive outlook on system improvement. The Board needs to actually do its job – be informed and make strategic plans for transit even if, in the short term, we cannot “afford” some options.

This will be a difficult term for the TTC Board who must wrestle with the proposed provincial takeover of the subway system, but this should not divert attention from several major issues affecting the transit system.

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Brill Bus Fantrip July 29, 1972

As a holiday gift to the fans of old buses (and I know you’re out there even if you think this is really a streetcar blog), a photo gallery from a fantrip I organized many years ago using one of the TTC’s Brill coaches. Bus 1935 dates from 1955, and was retired in the mid 1970s.

For more information on the TTC’s fleet before the arrival of the GM “New Look” buses, see Before the New Looks on Transit Toronto.

Why Can’t I Get On My Bus (II)

Correction August 15, 2018: Off peak service for the Westway branch of 52 Lawrence has been corrected.

In Part I of this article, I reviewed the evolution of bus and streetcar fleet capacity measured by scheduled service over the period from 2006 to 2018. The central point was that there has been little improvement in the overall peak period capacity operated on the bus network for much of the past decade. On the streetcar network, two recent changes – the addition of buses to supplement streetcars and the replacement of old cars by new, larger ones – have provided some peak period capacity growth. However, in both cases, this growth is small seen over the long run. Off-peak service has improved more because the system is not fleet-constrained outside of the rush hours, but there is still a budgetary limitation which affects how much staff are available to operate these vehicles.

In this article, I will review several major suburban bus routes to compare service in January 2009 when the benefits of the Miller-era Ridership Growth Strategy had kicked in with service operated in January 2018. Given the results seen in Part I, it was no surprise that when I compiled this information, many routes have less capacity today than they did a decade ago and improvements where they do exist are not major. That is not a recipe for system growth. How did this happen?

First off, when Rob Ford became Mayor, he rolled back the RGS Service Standards and service just stopped improving. Several off-peak improvements were undone, but these affected periods outside of the range reviewed in Part I (mainly evenings and weekends). Ironically, the streetcar system suffered less because, thanks to the vehicle shortage (even a decade ago), the loading standards for streetcars in the peak period had not changed. There were few RGS improvements to unwind. When John Tory reinstated some of the RGS standards, this allowed growth to resume, but almost entirely in the off-peak period because neither the bus nor the streetcar fleets had spare vehicles.

Another more subtle problem lies in TTC scheduling. As congestion built up on routes, the reaction was to stretch existing headways (the space between vehicles) rather than adding more buses to a route. This responded to the vehicle crunch, but it gradually trimmed service levels across the system. Even though the same number of buses were in service, with fewer passing a point per hour the capacity of service riders saw declined. The TTC made excuses for this practice as simply running buses to the conditions, but the long term effect was to cut service to keep operational demands within the available fleet size.

The balance of this post summarizes the data for each route. The full set of tables is linked below as a PDF.

2009_2018_ServiceComparisons_V2

A few notes about these tables:

  • Services are grouped by corridor because, in some cases, more than one route operates along a street. For example, Lawrence Avenue West has been served by 52 Lawrence, 59 Maple Leaf and 58 Malton (now folded into the 52).
  • Service capacity is shown as buses/hour. The only adjustment for vehicle size is that articulated buses count as 1.5 so that 6 artics per hour is the same, from a capacity point of view, as 9 regular-sized buses. Where a headway is followed by the letter “A” in the tables, this means that artics are operated.
  • In some cases, routes have a branch where every “nth” vehicle takes a longer trip. For example, some of the services running through to York Region have every 3rd, 4th or 5th bus going beyond the “standard” destination. These do not provide net additional service where the branches rejoin in the same way as a branching route where half of the buses go one way and half the other. In other words, if a 5 minute service runs to Steeles and every 4th bus runs beyond on a 20 minute headway, the headway to Steeles is still only 5 minutes, or 12 buses per hour. These cases are noted with an asterisk “*” in the tables.
  • Some routes were affected by the opening of the Vaughan extension. In these cases, data are shown for November 2017, the last set of schedules before the routes changed, so that the evolution of service right up to that point is clear.

The information for these comparisons is from the TTC Scheduled Service Summaries:

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Why Can’t I Get On My Bus?

Recent years brought much hand-wringing from TTC Board members and management about falling ridership numbers. One oft-cited source for this is the combination of fare evasion and the under-reporting of fare payments by Presto. These are linked in that the multiplicity of fares and rules create situations where a rider can validly enter a vehicle without showing a pass or tapping a card. Indeed, there are a number of cases where Presto users are explicitly told not to tap to avoid double charging by software that cannot distinguish many types of valid transfer movements.

Riders, on the other hand, might be forgiven for wondering whether there is enough service actually on the street to carry them. There are two aspects to this problem. One is vehicle bunching, a topic I will explore in coming weeks in detail for several major suburban bus routes, and the other is the actual amount of service.

An important factor in the provision of TTC service is that, in general, it lags demand growth rather than leading it. When the buses and streetcars are full, the TTC runs more of them provided that there is headroom in the budget, enough vehicles and enough operators to actually field more service. City Councillors have a fetish for controlling headcount, and this is one major problem at the TTC – more service requires more drivers (not to mention other staff), but increases to the approved staffing levels are only grudgingly approved. The other big problem for both the streetcar and bus fleets is that the TTC does not have enough vehicles thanks to constraints on capital spending and increases in garage capacity.

I wrote about the TTC’s capacity crisis in an earlier post, but here I will turn to the long-term trends in service provision. This is of particular interest in an election year when competing claims will be made about the actions and policies of current and previous administrations.

All of the charts included in this article as well as the underlying data are consolidated in one PDF linked at the end.

All data here comes from the TTC Scheduled Service Summaries. An archive of these is available on this site.

Scheduled Fleet Capacity

When tracking and comparing capacity for the bus and streetcar fleet, simply looking at the number of vehicles or the distance they travel is not enough. Other factors are at play including the capacity of each vehicle type, and the degree to which schedule changes are in the peak of off-peak periods. Maintenance factors come into play as well because the size of each fleet is larger than the scheduled service.

As a starting point, I converted the scheduled service to a fleet capacity by taking the “standard” vehicle as “1” and scaling up for larger vehicles. Note that the intent is only to track the ratio within each mode and the associated routes, and therefore a basis of “1” can be used for both fleets.

  • Standard 12m low floor bus: 1
  • Articulated low floor bus: 1.5
  • Canadian Light Rail Vehicle (CLRV): 1
  • Articulated Light Rail Vehicle (ALRV): 1.5
  • Flexity Low Floor Streetcar: 2
  • Bus running on a streetcar route: 0.7

Therefore, for the purpose of the chart which follows below, if a Flexity is scheduled to operate, it counts as twice the capacity of a CLRV. One immediate problem with this is that the TTC does not actually operate as many ALRVs as the schedules call for. Recently, although nearly 30 ALRVs are supposed to operate at peak, one is lucky to find a dozen of them on the road. Conversely, where a conversion of a route from old to new streetcars is in progress, there may be more Flexitys in service than scheduled. Similarly, one can find cases where bus trips that are supposed to be provided by longer artics are actually operated by standard length vehicles. The discrepancy between TTC schedules and the real world cannot be helped, and we must take the scheduled numbers as the intended service for an historical review.

To put this in a political context, in January 2007 David Miller beginning his second term as Mayor. He was replaced by Rob Ford in the election in fall 2010. John Tory was elected in fall 2014. The effect of a new administration is not visible in the January schedules which are generally in place before the election is determined.

The increase in bus service capacity in 2009 is the result of the Ridership Growth Strategy which changed the crowding standards to allow for less crowded vehicles. There is some growth in off-peak streetcar service capacity, but little for peak periods because there were no spare vehicles.

Peak capacity on the streetcar network begins to grow in 2013 with the substitution of buses on Queens Quay during its reconstruction while the displaced streetcars went to other routes. A few years later the arrival of the first Flexity cars and the continued substitution of buses on streetcar routes allowed more service to be provided on the streetcar network. The 514 Cherry route began operating in June 2016, but its requirements were absorbed within the available fleet.

Peak capacity on the bus network has not grown much in recent years. The downturn in January 2018 was caused partly by the opening of the subway extension to Vaughan and partly by changes in TTC spare ratio policies that reduced the number of vehicles available for service.

The big changes in recent years came in the off-peak period when there are spare vehicles in both fleets to provide better service.

In brief, there has been little improvement in the peak capacity operated on the TTC network for several years. For streetcar routes, there is some improvement, but for bus routes, not much for almost a decade.

There are a few caveats that must be included here:

  • The bus fleet capacity has not been adjusted for the migration from high floor to low floor buses which reduced capacity by up to 10%. This was already well underway in 2006, but there were still over 800 high floor buses in scheduled service in January 2006. Conversion to low floor buses represents a loss of a substantial capacity which is not reflected in the chart above.
  • In the mid 2000’s, the TTC operated more contract service than they do today. The decline in buses running outside of the city boundary is around two dozen (AM peak) counted as fractional vehicles where the service inside of Toronto is part of TTC routes that continue to exist. The capacity of these vehicles is included in the total.
  • These numbers represent vehicles in service. TTC maintenance practices have increased the spare ratio in recent years causing the total fleet size and garage requirements to rise while the actual amount of service does not. Some recent bus purchases made in the name of service improvements actually went into enlarging the pool of maintenance spares. These spares do not contribute to in service capacity and therefore do not affect the charts.
  • As traffic congestion increases, routes overall slow down, and the amount of service (counted as passenger kilometres) a vehicle can provide goes down. More buses are needed to carry the same number of trips. This factor is not included in the charts which only look at how many buses are in service, not how far they actually carry riders. The net effect is that service from a rider’s point of view does not go up as fast as the fleet capacity. Although this varies by route, there is a system wide effect that slower travel times “eat” buses and streetcars that might otherwise be adding to service.

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TTC Board Meeting July 10, 2018: Part I

The July 10, 2018 meeting of the TTC was its last before the October 22 municipal election. When the new Council meets in early December, it will update the Councillor appointments to this Board and select a new Chair. Whether the existing Chair Josh Colle will return in that role remains to be seen, although he did not sound averse to the idea in his closing remarks. The political balance of the Board will depend on the new Council and on whether the Mayor feels more disposed to a better representation of the centre-left. The new Board’s first meeting will be on December 12, 2018.

The “Citizen” members of the Board (those who are not Councillors) will remain in place until Council deals with appointments to various boards and agencies early in 2019.

The TTC has appointed Rick Leary, who has been Acting CEO since Andy Byford’s departure, to the CEO’s position. Leary had strong support from the Board, and now he must deliver. It will be interesting to see how much of Byford’s style and work, if any, are carried over into this new era. [See Challenges For TTC’s New CEO].

A vital part of the Board’s responsibility (and through them, City Council’s) is a clear understanding of the future needs of transit in Toronto. This is not simply a case of planning a few subway lines, but of understanding how the network as a whole works and what its needs would be under various scenarios. This is especially true when addressing unmet needs of the existing system. From the CEO’s report:

In support of the City of Toronto’s ongoing focus on transformation, the TTC committed in the 2018-2022 Corporate Plan to undertake a comprehensive service review. In addition to assessing efficiency and effectiveness, the study will evaluate how best to provide services mindful of reliability, safety and system integration. Actioning this commitment will help inform deliberations of the newly-appointed Board in 2019. In tandem, as noted last month, we are also preparing an updated and comprehensive long-term Capital Plan that will provide full clarity on the TTC’s long-term capital requirements mindful of legislation, reliability, safety and service standards. The plan will be prepared over the course of 2018 and presented as part of the 2019 Budget process. [p. 8]

This woolly statement could be the basis for better understanding how the Capital Budget works and how its many projects fit together, or this could simply be a rehash of juggling costs back and forth to make the numbers come out right for City financial targets. If the TTC needs more money for bona fide projects, it should say so, and should make the spending levels and timing clear rather than hiding costs “below the line” or beyond the 10-year planning horizon.

Several items on the agenda bear on the TTC’s ability to carry riders, but they were not discussed or presented in that context. This is a fundamental problem for the TTC Board and for the new CEO.

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TTC Plans For a Zero-Emission Bus Fleet

Updated June 13, 2018: Discussion and motions from the TTC Board Meeting added.

At its meeting on June 12, 2018, the TTC board will consider a staff report which sets out in some detail the first stages of Toronto’s migration from diesel and diesel/hybrid buses to a zero-emission fleet.

The TTC’s abrupt shift from diesel to zero-emission followed a July 2017 motion adopting the TransformTO climate change plan which included a reduction target of 80% by 2050. After continued defense of “clean diesel” technology on the basis of cost and reliability, ongoing problems with Hybrid buses, and a view that new technologies were not yet mature enough for system-wide use, the TTC has reversed course and embraced a move to buying only zero-emission vehicles by the mid-2020s. As older vehicles reach end of life, the diesel and hybrid fleets would gradually disappear.

In September 2017 at an unusual Board meeting a vendor, BYD, was given the opportunity to make an extended product pitch as a “deputation”. This led to a more general interest in zero-emission vehicles from two other vendors (New Flyer and Proterra), as well as natural gas alternatives thanks to lobbying by Enbridge Gas.

In November, the Board approved a 30-bus trial with ten vehicles from each of the three vendors, as well as a less definitive study of the role of gaseous fuels.

A major problem through the entire process is that much of this is new technology, and there are many competing claims for its suitability that are not yet substantiated by real world experience. A recent article in the Los Angeles Times details problems with their battery buses and the gap between promises and actual performance.

Toronto is just beginning to learn the cost of moving to a greener fleet and the escalation not only in vehicle costs but in related infrastructure. $50 million has been allocated for those first 30 buses, and a further $88 million is on the table for another 30 plus associated infrastructure. The report is deliberately vague about specific prices for vehicles because negotiations with vendors are still underway.

Without extra investment by other governments, the technology change simply would not happen. In a November 2017 report, TTC staff noted that battery buses were “significantly less expensive” than other options based on the availability of PTIF funding.

Indeed, the current plan is structured to burn through as much of the Federal government’s Public Transit Infrastructure Fund Phase I money as possible. When PTIF was announced, all projects to be part of the first phase were required to be finished by March 2019. This is partly a political date given the election next year, and partly an accounting requirement so that spending occurs within a few fiscal years (government fiscal years start on April 1). The PTIF deadline was extended from 2019 to 2020 when it became obvious that actually spending the new money would not be possible for many cities.

Toronto found itself without projects either in the City or Transit budgets that could soak up the available money in only a few years, and initially the focus was on a massive replacement of the bus fleet to retire the worst of the older buses and, at the same time, shift from an 18-year to a 12-year replacement cycle.

In this context – a subsidy windfall plus an unusually large, multi-year bus order – the opportunity for a fast change in technology presented itself both to the politicians and to the would-be vendors. Whether this will work out remains to be seen, but the TTC is moving cautiously with a trial program that will determine whether the new technologies are credible replacements for what we have today. Meanwhile, the TTC will shift back to Hybrids from Clean Diesel on the premise that Hybrid technology has improved since the less-than-reliable generation of buses they are about to retire.

Recommended Action

The staff report recommends that:

  1. The quantity of electric buses will be increased from 30 to 60 with all vehicles to be delivered by March 31, 2020, and the TTC will work with Toronto Hydro on the design and installation of charging and energy storage systems; the project cost is increased from $50 to $120 million.
  2. The TTC will work with Toronto Hydro to modify one bus garage to accommodate up to 300 buses through the supply of a substation and backup generator at an estimated cost of $18 million.
  3. Staff will provide a project update in first quarter 2019 to the new TTC Board following the Council election in the fall of 2018.
  4. Staff will conduct a feasibility study of all garages and report in the fourth quarter of 2019 on “preliminary estimates for the total costs, benefits, and potential funding opportunities associated with the green bus plan”.

Separately from these reports, staff will present a plan in July 2018 feeding into the 2019 budget process with updated capital plans and tradeoffs necessary to free up money for the new bus infrastructure.

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TTC 2018 Capital Budget: (1) Fleet Plans

The TTC’s detailed version of the Capital Budget is known as the “Blue Books” because they are issued in two large blue binders. They are not available online. Over coming weeks, I will post highlights from this material beginning with the fleet plans.

These plans were drawn up in late 2017 as the budget was finalized, and there have actually been changes since that are not reflected here. I will note these where appropriate.

For starters, a review of how all of these capital projects are paid for.

Financing and Funding the Capital Budget

The TTC’s budget process at times looks like a game of Three Card Monte where one is certain that one card is the Queen of Diamonds, but never quite sure where she is. This shows up in various ways:

  • There is a “base program” consisting of projects that have Council approval for inclusion in the ten-year plan. The estimated cost of this program is $9.240 billion, but there is funding shortfall of $2.702 billion.
  • There is an “unfunded list” of projects making up the shortfall. These will migrate to funded status as and when money becomes available.
  • The City requires that the TTC make provision for “capacity to spend” reductions in its projects based on the premise that all of the money in the budgets will not actually be used. This offsets $427 million of the shortfall, although one can argue that this is a polite fiction meant to convey the idea that the funding hole is not quite as deep as it seems. The premise is that not all projects will be spent to their full budgets, and an across-the-board provision will soak up the underspending. In practice, some of this “shortfall” is a question of timing – project slippage that shifts spending to other years – not a question of budgeting too high.
  • Some projects have their own, dedicated funding streams and appear separately from the base program. At present, these are the subway extensions to Vaughan and to Scarborough.
  • Some projects in the base program have funding directed specifically to them. The provincial 1/3 share of the new streetcars is an example. This is separate from provincial money that flows to Toronto from the gas tax.
  • Some projects have timelines associated with the structure of funding programs. Ottawa’s Public Transit Infrastructure Fund (PTIF) Phase 1 requires that projects be completed by March 31, 2019 so that the subsidy is expensed, federally, by the end of the 2018-19 fiscal year. PTIF phase 2 has not yet been announced either as to amount or to the timeframe in which spending will occur. These constraints prevent many projects from receiving PTIF money because they do not fit within the prescribed window for spending.
  • Metrolinx projects do not appear on the TTC’s books, but in some cases they can trigger payments from the TTC and/or the City of Toronto. Examples are Presto and SmartTrack.
  • Some transit proposals are not even in the base program, but wait in readiness as “nice to haves”.

“Funding” is the process of paying for projects, while “Financing” is the mechanism by which that money is raised. A “funded” project is associated with revenue from “financing” sources that the City can depend on such as property taxes and committed monies from other governments. Where there is a shortfall, someone has to step up with new money, however they might raise it, or something must be removed (or at least reduced in scope) from the list of funded projects.

City of Toronto contributions to capital come primarily from current taxes (“capital from current” and development charges) and from borrowing. The amount of borrowing available to the TTC each year is dictated by the City’s self-imposed 15% cap on the ratio of debt service costs to property tax revenue. A few major projects in the near future, notably the Gardiner Expressway rebuild, are crowding the debt ceiling, and there are years when little new debt will be issued on the TTC’s behalf. In turn, this affects spending plans at the TTC, and projects are shifted into future years with more borrowing room to get around this.

Other constraints can arise from a program like PTIF which, because it has a sunset date, requires that spending that might otherwise occur some years in the future must actually happen sooner than planned. This, in turn, requires matching funds from the City in years where they might otherwise have been spent on other projects.

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