Updated January 28, 2012 at 10:15am: One intriguing point about the proposed service restorations is the formula on which they are based. Originally, the off-peak standard for frequent services was to change from “seated load” (on average) to “seated load plus 25%”. On this basis, several routes and periods of operation would have service cut so that the allegedly existing seated loads were given 20% less service.

(If you have five buses each with a seated load, and you cut the service to four buses (a 20% cut), then one quarter, or 25%, of the seated load from that fifth bus much be added to each of the remaining vehicles.)

Now the TTC proposes a standard of “seated plus 15%” saying that this will rescue many of the services that would have been cut. Hello TTC. If an existing service is already at seated plus 15%, then it is most certainly over the current standard of a seated load. The same sort of calculation applies to the peak period bus routes that were already saved by an adjustment of the new standard.

The common point here and in the round of service cuts on lightly used routes last year is that the TTC’s riding counts are out of sync with the service they actually operate. One one day, a revised standard may cause a service cut, but on another, amazingly, it turns out that there were more riders on those buses and streetcars than we had been led to believe. Certainly many routes are operating beyond the “Ridership Growth Strategy” standard, and the amount of headroom to cut service is less than alleged by KPMG’s Core Services Review. That document is a tangle of half-truths and bad research, but it was the underpinning of planned cuts to many City departments.

Why didn’t the TTC explain this during the budget reviews?

Updated January 27, 2012 at 11:25pm: A “final budget” report on the TTC’s agenda for the January 31 meeting recommends spending the $5-million voted by Council either on restored service on the conventional system, or on avoiding a cutback in Wheel-Trans service. The report includes a list of services that would be restored on March 25, 2012 reversing completely or partially the cuts pending for February 12, 2012. There is no discussion of service restoration (which would require redoing the work sign-up for February on very short notice) for the period from February 12 to March 24.

While funding of Wheel-Trans will be advanced by some as a more humane way to use the $5m, the very clear intent of Council and of everyone who spoke in favour of this funding was to restore service on the regular bus system. Wheel-Trans funding is a separate issue that even the TTC had agreed to leave until mid-year pending possible funding from another source.

At the meeting, we will see whether the Commission chooses to thwart the will of Council, and whether Councillors who voted the additional money will show up to read the riot act to those Commissioners who do not understand that Mayor Ford lost that vote, and the TTC should get on with restoring regular service.

Those who argue that the $5m is “not sustainable” because it is drawn from one-time funding conveniently ignore that it will have this status whether it is spent on regular routes or on Wheel-Trans. Moreover, it is entirely likely that a good chunk of this money will appear in fare revenue from riding that is running ahead of budget predictions.

Updated January 23, 2012 at 10:55pm: The option of using the extra subsidy voted by Council as part of the capital budget to pay for new streetcars has been ruled inappropriate by the City’s legal staff because this conflicts with the wording of Council’s motion. However, because “restore service” could also be construed to refer to Wheel-Trans cuts (although that was not the intent), it is possible that the Commission might sneak through redirection of the funding anyhow. How this will sit with Councillors who thought they were saving regular service remains to be seen.

The original article from January 18, 2012 follows:

In a surprise victory at City Council, progressive forces — an alliance of the left, the “mushy middle” and a few from the right wing — combined to restore funding in the 2012 budget in several areas including the TTC’s subsidy. The vote on January 17 was as close as it could be with a 23-21 margin (one Councillor was off sick, and the vote would have been 23-22 if he were present).

The TTC will receive an additional $5-million for its operating subsidy in order to reverse some of the planned service cuts. This is less than the full amount needed ($9m), and will likely result in a concentration on off-peak services. Why only $5m? The political compromise needed to pull together this vote involved a lot of horse trading, and many of the amounts involved for other budget areas were considerably lower — in the hundreds of thousands rather than millions — and the overall package had to stay within a scope the coalition could support.

The TTC must now consider how it will use the money, and the mechanics of unwinding cuts that have already been scheduled for mid-February.

As the TTC developed its 2012 budget, the first big challenge was to absorb a planned 10% cut in City funding (roughly $40m). This was compounded by a large anticipated jump in diesel fuel prices and the need to provide service to a rapidly growing demand. The original scheme to offset these and other limits on the budget was to cut service by reverting to the 2003 loading standards. This would have increased crowding on many routes both during the peak and offpeak periods.

By December 2011, the Commission (a board drawn almost entirely from Ford’s loyal followers on Council) was feeling the heat, and they discovered a way to undo part of the planned cuts. The cost of fuel was no longer forecast to be quite so stratospheric, and this freed up $5m that would be used to defer all cuts to mid-February, and to cancel the peak period cuts on about 20 very busy routes. This approach clearly left open the possibility of additional funding coming from revisions to the City’s budget in January.

All the same, the normal operation of TTC scheduling and work selection required that the mid-February work be planned and posted for operators to select their crews. This has already been in progress, and notices about service changes began to appear around the city at bus and streetcar stops late last week. When the Commission reversed its original plans for January cuts back on December 14, the sign-up process was repeated for January with the old schedules. If February’s cuts are to be backed out, a similar tactic will be needed now, but without enough money to undo all of the cuts, it won’t be as simple as just using the old schedules for another 6 weeks.

TTC management are now figuring out exactly what they will do, and I expect that there will be an announcement soon with the details. One option is to run the February-March period as planned, service cuts and all, and then back out some of the cuts for the next set of schedules. How this would sit with riders who, if they believe news stories, think that there will be no cuts at all, remains to be seen.

The longer term situation is more complex. By cutting the Service Standards, the TTC reduced its need for new buses. That changed future plans both for the total fleet size and provisions for garage space to handle growth that would push the TTC beyond its existing capacity. This change contributed to a reduction in the TTC’s long-term capital plan, another of the demands made by the City to fit TTC’s needs within Toronto’s self-imposed cap on total borrowing for capital programs.

If peak Service Standards remain at their 2011 level, the TTC will run out of spare buses to increase service by the fall of 2013. At this point, it is unclear whether they can resurrect their now-cancelled order, or if they must rejoin the queue for a later delivery. Also, the Capital Budget must be updated to reflect both the added buses and some provision for their storage.

TTC’s capital needs very substantially exceed the money available to pay for them thanks to the gradual withdrawal of provincial and federal support. Various stimulus programs have more or less wound down, and the vast majority of transit subsidy at both levels is targeted to specific projects (the Spadina subway extension, the Eglinton LRT/subway) rather than to general system needs. Provincial gas tax funding is split roughly 60/40 between operating and capital, and this leaves almost nothing beside a much larger ongoing capital requirement.

During the budget debates at Council, the order for new streetcars became the scapegoat for the TTC’s capital problems. This project has a total cost of about $1b just for the vehicles, not to mention the new carhouse at Ashbridges Bay and upgrades to the streetcar infrastructure (mainly the overhead power distribution system and retrofits at the two existing carhouses). Queen’s Park will pick up 1/3 of the cost for the streetcars, but the rest is on the City’s tab. (A hoped-for 1/3 from Ottawa never materialized, and the now-solidly Conservative political climate there is unlikely to improve chances for new federal subsidy programs.)

Over and over we heard how any spare money the City has in its budget should be directed to a reserve to pay for the new cars (the roughly $700m City share). Aside from Mayor Ford’s openly confessed dislike of streetcars, more was going on here than meets the eye.

Throughout the 2012 budget process, Ford’s goal has been to cut off sources of revenue and, through this, to strangle programs he dislikes. This was presented with the mantle of “fiscal responsibility” and of getting the City’s budget into a “sustainable” state. The nub of the debate is the annual surplus in the Operating Budget.

Because municipalities are legally barred from running an operating deficit, their budgets tend to be drawn up conservatively so that they are not caught short. Toronto has run a surplus for the past six years, and it is common for a good chunk of this to be rolled into the next year’s budget as revenue. However, if times turn bad, so goes the argument, the “surplus” will vanish and Toronto will find itself short.

Meanwhile on the capital side, there is the problem of how to pay for a massive amount of transit spending of which the streetcars are only part. Over $1b in planned projects has already been deferred beyond a 10-year horizon so that it does not officially appear in the budget projections. However, that doesn’t make it vanish.

Ford’s proposal, one that only surfaced at a recent Executive Committee meeting, was that any operating surplus be dedicated to a reserve fund until the $700m needed for Toronto’s share of the streetcar purchase was fully-funded. I might have more faith in this scheme if it had appeared as part of the original budget proposal last summer, but as a last-minute add-on it is suspect. Ford’s real desire is to cut off the surplus as a fund available to allow last-minute budget changes by Council. We hear endlessly about the horrible budget pressures the City faces in the most apocalyptic of descriptions. Greece and the failing European Union are invoked as spectres of what Toronto might become.

In fact, part of the City’s financial pinch was self-inflicted by cancellation of the Vehicle Registration Tax and by a property tax freeze in 2011. How was this funded? With some of the 2010 operating surplus.

If the surplus, whatever its size, were dedicated to filling up a large transit reserve, this would scoop all of the available funding for four to five years and put it out of Council’s reach. Councillors and “special interest groups” who complained would be painted as trying to deny downtown Toronto of its precious streetcars, vehicles that (Fordists claim) should never have been ordered in the first place without guaranteed funding. That’s hogwash because “guaranteed funding” is available through taxes and debt provided one has the will to undertake it.

Paying for the streetcars with the surplus uses a supposedly unreliable source of funds and would probably do so in a shorter time period than the actual delivery and payment schedule for the cars. If this purchase really is to be paid from current revenue, not from debt, the actual payments would stretch over a longer period assuming the surplus continues at roughly it current level.

Thus Ford’s hated streetcars would be used as a bludgeon both to sweep the surplus funds off of the table for the foreseeable future, and as a way to taunt his (mainly) downtown political enemies that the financial crunch was of their own making. If the “surplus” actually became a standing part of the budget process, this could evolve into a de facto slush fund for other major projects such as the Sheppard Subway while doing nothing for overall transit capital needs.

Council didn’t go along with this, and reaffirmed its policy that any surplus not otherwise scooped as part of a following year’s budget would go into capital reserve funds. TTC capital needs will be dealt with year-to-year as part of the overall capital plan.

The political history of this budget goes back to mid-2011 when Mayor Ford through the City Manager issued an edict that all departments must cut 10% from their budgets for 2012. Things didn’t quite work out that way, notably with the largest single item in the City budget, the Police Service, where after much breast-beating by the Ford faction and the Police Chief, the police actually wound up with a small increase for 2012.

Other line-by-line rescues were mounted at the Ford-dominated Budget and Executive Committees, ostensibly in response to last-minute discoveries of new revenue, but actually to a growing evidence of unrest among Toronto’s citizens. Support for Ford’s slash-and-burn budgeting weakened the more Toronto learned how the seas of “gravy” supposedly washing across Nathan Phillips Square were actually puddles. By the time the budget reached Council, a forum where Ford’s control has slipped away, there was a chance to wrest control of the process from the right wing, and that’s what happened.

The TTC now faces a challenge of policy and of planning for coming years, and the fact that the Commission is dominated by people who would rather preserve Mayor Ford’s fiscal view of the world does not bode well for the thorough discussion Toronto really needs about its transit system.

We already know that ridership is running ahead of projections for the 2012 budget, and that even with what funding Council has provided, the TTC will not be able to operate enough service to handle continued growth at the present rate (over 4%). The uncertain future of major projects such as the Eglinton LRT/subway and the Sheppard line, the unknown status of Transit City or of any other transit improvements, and the on-again-off-again question of how the TTC will handle growing demand on the subway system — all these require a thorough, public review of transit’s status and options for the future. We cannot afford to have budgets appear, assumptions and all, without the detailed background needed to understand the effect of what may seem to be short-term decisions.

Some Commissioners still don’t get the distinction between peak and offpeak service where the latter requires no new capital assets, only more operators, and where the marginal cost of service is lower. TTC riding growth is strongest in the offpeak, and yet that is where the planned service cuts were concentrated.

If the Toronto had gone forward with the planned service cuts and with the associated downsizing of fleet and staff, we would inevitably hear excuses for years on end about the difficulty of restoring the system to what we had in 2011. Although the Ridership Growth Strategy dates from 2003, the actual implementation took years to complete because other factors always seemed to get in the way. There weren’t enough operators, or buses, or whatever. Transit systems are large, and a decision to improve service quality cannot be implemented overnight.

February will probably bring an update on the Sheppard Subway project, and moves are already underway to force a vote at Council to undo the madness of the fully underground Eglinton LRT. Rumours have Queen’s Park simply waiting for an official request to justify a return to their original plan while other rumours have some at the TTC pushing for a full-scale Eglinton subway. Such is the state of transit “planning”.

Council gave the TTC $5m, a tiny sum beside a $1.5b budget. What Council did not give was long-term direction on where the TTC should be going. That decision cannot be left to the Commission itself without a full and honest public debate about the future of transit in Toronto.