Toronto’s budget debate for 2012 brought many issues of transit financing into the open thanks to an ill-considered proposal by Mayor Ford to cut transit operating subsidies by 10%. Recently the TTC put off implementing service cuts originally planned for January 8, 2012, pending a decision by Council on the final version of the budget and the level of TTC subsidy.

However, the TTC’s Operating Budget is not the only one that is constrained by City spending policies. On the Capital Budget, the total projected City borrowing required to pay for all of the projects the TTC would like to undertake exceeds a self-imposed target on total City debt. To bring the 10-year debt projection within that target, the TTC restructured its capital plans.

Some projects were postponed beyond the 10-year window so that some or all of the spending (and associated debt) did not count, or might be offset by future improvements in subsidy programs from other levels of government. Other projects were modified in scope or cancelled.

I discussed the amended Capital Budget in a previous article, but the current debate about Service Standards also has a capital component. Among the cutbacks on the capital side were a purchase of new buses and the provision of storage space to hold these vehicles.

An order for 134 new buses (of which 26 were for “contingency” to handle unexpected growth in demand) has been cancelled along with the provision of temporary yard space. Before Transit City was proposed, the TTC had planned to build another bus garage to accommodate its growing fleet. However, Transit City (plus the opening of the Spadina subway extension) would replace some existing bus service with rail, and reduce the total bus fleet requirement.

Even with a short-term pre-Transit City bulge, only temporary storage would have been needed. However, now that much of Transit City has been either cancelled or pushed off into the next decade, there will be continued pressure on the bus fleet and on the need for storage space.

The Spadina extension will not open until late 2015.

The Sheppard subway, if it is actually built, will cover only the portion of the Sheppard East bus services west of Kennedy. Service east to Meadowvale will still be provided by buses. The original opening date for the Sheppard LRT was 2013.

Finch West will continue to be served by buses, not an LRT line that originally would have opened in 2013.

The proposed extension of the SRT to Malvern was originally planned to open in 2015. In the revised plan, this extension has been dropped.

In a briefing note, TTC’s Chief General Manager Gary Webster states that the capital cost of restoring the bus order and storage for the vehicles could be up to $93-million. However, in the TTC’s budget presentation, this number is stated as $73m (see Shortfall Reduction Plan on page 52). If the order is reinstated, the quantity of buses will be smaller by at least the contingency of 26 according to staff comments at the TTC’s last meeting.

The challenge in this whole process is to understand just how big the bus fleet should be given the robust state of TTC ridership. For this we must first go back to the bus fleet plan as it existed in 2006.

There were two competing views of the future for ridership. In one version, growth would continue at just over 1% per year following a long trend of the past decade. In another version, growth would be more robust at 3% per year. The bus fleet plan had been based on the lower rate, but if the stronger trend prevailed, the TTC would need more buses sooner. A new garage would be needed by 2012/13 even at the low growth rate, possibly by 2010 if the fleet grew faster than expected.

Indeed, stronger growth is exactly what arrived. On the original projection, ridership was expected to grow from 436m to 469m between 2006 and 2011. At the higher rate, it would reach 505m. The actual number we now know will be about 499m. The accelerated growth began just after the Ridership Growth Strategy (RGS) rolled out, a policy the current crop at the TTC would undo in the name of “efficiency”.

By 2010, the fleet planning had to take into account new factors including the proposed Transit City LRT lines and the Spadina extension. Transit City was expected to displace 168 buses between 2014 and 2019, and a further 30 would be replaced by the Spadina extension in 2016. This led to a plan in which there would be no bus purchases for several years, and the total fleet would actually shrink through attrition back to 2008 levels, well within the capacity of existing garages.

By early December 2011, the active bus fleet stands at 1,820 vehicles for a scheduled peak service of 1,520. Requirements for 2012 and beyond will be very different depending on the service quality and ridership we assume in making fleet plans.

Service actually operated in 2011 was based on a budgeted ridership of only 487m, not the 499m Toronto actually achieved. This is one reason why there are some routes already over the supposed loading “standards” — there is no budget to operate all of the service the standards would dictate. Conversely, the planned cuts on some routes are impractical and this situation is tacitly admitted by the proposal to retain service on “busy” routes.

If the RGS service standards are retained, then the planned peak cutbacks on major bus routes cannot go forward. In the short term, this can be handled with the existing fleet, but more buses will be needed (by the TTC’s projection) in fall 2013.

Multi-year projections in the TTC budget (see TTC Final Budget report for 2012 at Page 7) start from a base of 503m in 2012 and rise to 523m by 2015. The base itself is less than 1% above 2011’s projected 499m, and the cumulative growth rate is about 1%. By contrast, ridership is running over 4% above last year, and an ongoing rate of 3% should be easily attained provided that there is sufficient capacity and no economic catastrophe to drive down demand overall.

If we take 499m for 2011 and increase at 3% per annum, this would give a cumulative increase of about 12.5% to 2015. In turn, the bus fleet would have to grow from 1820 to 2045.

The TTC has not published a detailed fleet plan including such an analysis, but this is as important to the future of Toronto’s transit as the fantasy subway plans. The capital budget does not include any projection of funding needed to sustain strong transit growth, and the operating budget assumes a much lower rate of growth than we actually see. The situation is very much like the one back in 2006.

Delaying or cancelling the implementation of Transit City created a crisis in the bus system’s ability to serve growing demand. The Commission’s response is merely to cut service and ignore future problems with meaningless, low-balled projections of ridership, fleet requirements and operating costs.

Most of the transit Commissioners don’t want to entertain these debates because to do so counters the received wisdom that transit funding must be cut no matter what. They might even have to admit that the course they advocate — of limiting the growth of service and capacity — is truly a “service cut”, certainly a reduction in the attractiveness and quality, such as it is, of the system, not merely an “efficiency”.

This type of “planning” badly serves Council and the citizens of Toronto because we don’t know what the alternatives are and the implications of various future paths. Indeed, we risk hobbling the TTC with reduced service, fleet and staff, and creating a hole out of which a more-enlightened administration must first dig just to undo past errors.

Postscript:

In a Briefing Note to the City’s Budget Committee, the TTC advises that it is contemplating the purchase of 150 articulated buses in 2014-16. If Council decides to retain higher service quality in 2012, the need for these buses could be accelerated.

Seven routes (not named) would convert to artic operation. The fleet replacement ratio the TTC would use is 1.35:1.

The anticipated annual saving would be $60k/bus mainly in the labour cost of drivers. The annualized saving with the 150-bus fleet fully in operation would be $9m. Savings from this scheme have already been built into the multi-year budget projections.