A 5-cent hike in the price of a token — $2.50 on a monthly Metropass — has been approved in principle by the TTC as it seeks to close a $28 million gap in its operating budget.

The commission says the Jan. 1 increase would generate $18 million, leaving $10 million still to be found.

“No one likes fare rises. Ideally we wouldn’t have to raise the fares,” said TTC CEO Andy Byford. “But there’s basically four pressures on the TTC budget: Those are fares, subsidies, efficiencies and service levels. I don’t want to cut the service levels.”

The TTC hasn’t yet finished its budgeting, but the fare increase is based on the assumption that the city won’t be increasing its transit subsidy this year — leaving it the same $411 million it gave the TTC last year.

Although the TTC is attracting record ridership, with 528 million riders projected for 2013, each rider will require a 78-cent subsidy. Seventy per cent of TTC operating revenue comes from fares, among the highest recovery among North American transit systems. In 2010, the latest available figures, Los Angeles subsidized each rider with $4.16, Vancouver, $2.92, and York Region $5.16, according to a report by TTC chief financial and administrative officer Vince Rodo.

At the same Toronto Transit Commission meeting Thursday, an angry transit workers’ union president Bob Kinnear warned executives there will be retribution for the TTC board’s decision to outsource its bus cleaning.

“Conceivably some of our operators may not notice the fare box is being shortchanged,” he said, after the city councillors on the Toronto Transit Commission approved the contracting-out of 159 bus cleaning jobs in a bid to save $4.29 million a year.

Kinnear wouldn’t rule out any job action but said, “We are going to do everything we can to ensure there’s no disruption to the riders.”

Earlier he told the commission his union could refuse to do overtime that saves the TTC $10 million to $13 million annually in hiring more workers.

“We are not going to go out of our way to save the TTC when they’re contracting out jobs,” Kinnear said.

The TTC plans to outsource the work at two of its eight bus garages initially. The others wouldn’t be contracted out until it was clear what savings and service are achieved by using a contractor. Contractors would also be prohibited from sub-contracting the cleaning, the commission decided.

TTC chair Karen Stintz said the union did not respond to an offer to meet the TTC’s price of $18 an hour, from the $27 cleaners currently earn.

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“If he comes back with a competitive bid, we can always contract this work back in after our contract with our external supplier expires,” she said.

None of the unionized cleaners will be let go. They will be absorbed into other TTC jobs.

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