Board Meeting - June 8, 2011

(Public meeting to commence at 10:00 a.m. to deal with Declarations of Interest and a resolution to conduct a portion of the meeting in the absence of the public. The Commission will immediately meet in the absence of the public (referred to as “Committee of the Whole”) to deal with Confidential Items and will reconvene the portion of the meeting open to the public at approximately 1:00 p.m.)

RESOLUTION TO CONDUCT A PORTION OF THE MEETING IN THE ABSENCE OF THE PUBLIC (COMMITTEE OF THE WHOLE) IN ACCORDANCE WITH SECTION 29 OF THE TTC BY-LAW TO GOVERN COMMISSION PROCEEDINGS AND SECTION 190 OF THE CITY OF TORONTO ACT

1. Union Negotiations Update (Verbal)
   (This report is about labour relations or employee negotiations)

Meeting (OPEN TO THE PUBLIC) – 1:00 P.M.
Committee Room 2, 2nd Floor, City Hall

• Meeting No. 1936 - June 1, 2011

Nil

Presentations will be heard at 2:00 p.m. Requests to speak must be registered in writing by 12:00 Noon of day preceding meeting day.

Nil

Nil

Nil

1. Reports with Confidential Attachments (Committee of the Whole)
   • Union Negotiations Update (Verbal)(This report is about labour relations or employee negotiations)
2. Presentations
   • 40 Years Long Service Acknowledgement (FOR INFORMATION)
3. Budget matt40 Years Long Service Acknowledgement (FOR INFORMATION)ers

   NIL

4. Procurement Authorizations
   • Procurement Authorization – Benefit Plan Carrier for Provision of Employee and Pensioner Benefits (FOR ACTION)
   • Procurement Authorization – Design Services for Wilson Facility Enhancements and Yard Expansion – Contract AW85-2 (FOR ACTION)
   • Procurement Authorization – Voice/Data Telecommunication
   • Summary of Authorized Expenditures between $1,000,000 to $5,000,000 for the Period March 1, 2011 to March 31, 2011 (FOR INFORMATION)
5. Procurement Authorization Amendments

   NIL

6. Notice of Awards

   NIL

7. Service Matters
   • TTC Replacement of Streetcar Tracks on Queen’s Quay West (FOR ACTION)
8. Other Business
   • 2010 Annual Human Rights Unit Report (FOR ACTION) PDF file
   • Senior Management Annual Review of the Environment, Health and Safety (EHS) Management System, Minutes of March 29, 2011 (FOR INFORMATION)
9. New Business

   NIL

10. Correspondence

    NIL

A correspondence summary will be distributed at the meeting.

1. 2012 TTC Operating Budget (FOR ACTION)
2. 2012-2016 TTC Capital Program and 10 Year Forecast (FOR ACTION)
3. 2012 Wheel-Trans Operating Budget (FOR ACTION)
4. Electronic Fare Collection at the TTC (FOR ACTION)
5. Delegation of Authority – Procurement Authorization Amendments – Low Floor Light Rail Vehicle Contract (FOR ACTION)

K. Stintz (Chair), P. Milczyn (Vice-Chair), M. Augimeri, V. Crisanti, F. Di Giorgio, N. Kelly, D. Minnan-Wong, C. Palacio, and J. Parker (Commissioners), G. Webster (Chief General Manager), V. Rodo (General Manager – Executive & General Secretary), J. Sepulis (General Manager – Engineering & Construction), D. Dixon (Acting General Manager – Operations), B. Frost (Deputy General Manager – Bus), B. Leck (General Counsel - Legal), B. Ross (Director – Corporate Communications), C. Upfold (Chief Customer Service Officer), M. Roche (Chief Financial Officer), D. Presley (Chief Accountant – Capital Projects), P. Buttigieg (Chief Accountant – Financial Services), A. Iannucci (Chief Information Officer), S. MacDonald (Manager –Materials & Procurement), A. Smith (Chief Marketing Officer), M. Stambler, (Chief Planning Officer), V. Albanese (Director – Human Rights), T. Baik (Chief Project Manager – Construction), B. Hughes (Chief Project Manager), J. Smerek (Enterprise Architect – Information Technology Services), K. Lee (Assistant General Secretary) and F. Stanois (Co-ordinator – Corporate Secretariat Services) were present.

K. Stintz was in the Chair.

Nil

Commissioner Augimeri moved that the Commission approve the minutes from meeting No. 1935 and that the Chair and General Secretary be authorized to sign the same.

The motion by Commissioner Augimeri carried.

Nil

Chair Stintz moved that the Commission recess to meet as the Committee of the Whole to deal with litigation or potential litigation matters, labour relations, employee negotiations, and to receive advice which is subject to solicitor-client privilege.

The motion by Chair Stintz carried.

Meeting (open to the public) – 1:05 P.M.
Committee Room 2, 2ND floor, City Hall

Prior to re-commencement of the agenda, Chair K. Stintz and Chief General Manager G. Webster took a few moments to describe the unfortunate circumstances of a lighting strike that occurred earlier the same morning in the Wilson Subway Yard and the resulting negative impact to the subway signaling system in the area.  Service on the Yonge-University-Spadina subway line was adversely affected due to difficulty moving trains onto the main line.  The opportunity was taken to describe the overall response efforts that are undertaken in these unfortunate situations and how important that response is to the overall customer perception of the TTC when challenges of this nature arise.  Both Chair K. Stintz and Chief General Manager G. Webster were on the Yonge-University-Spadina line during the morning rush period and were able to provide comments on their personal experiences as well as offer apologies to TTC customers who were negatively impacted during their TTC travels that morning.

a) TTC Replacement of Streetcar Tracks on Queen’s Quay West

Councillor Pam McConnell
City of Toronto

The Commission received the deputation for information.
(See item No. 7(A) for minute).

b) Importance of Public Transit  During Hot Weather and Smog Alerts

Daniela Mergarten and Kamilla Pietrzyk
Fair Fare Coalition
(Submitted Brief)

The Commission received the deputation and referred the request for free transit on smog alert days to staff for consideration during the 2012 Operating Budget process.

c) 2012 TTC Operating Budget

Brian Boehlert

Jamie Kirkpatrick
Toronto Environmental Alliance

The Commission received the deputations for information.
(See item No. 11 for minute).

d) Electronic Fare Collection at the TTC

Kenneth Dodd and Sanford Weinberg
Affiliated Computer Services (ACS)

The Commission received the deputation for information.
(See item No. 14 for minute).

Nil

Nil

Nil

Nil

1. Reports With Confidential Attachments (Committee Of The Whole)

a) Union Negotiations Update

 The Commission:

1. Received a confidential verbal update regarding labour negotiations.

2. Authorized release of the information provided following ratification of the agreements by all parties.
 
2. Presentations

a) 40 Years Long Service Acknowledgement

Chair Stintz presented the following employees with framed certificates for achieving 40 years of service at the TTC during 2009 and 2010:

• Robert Campbell 
• Anthony Simeron
• John Powell 
• Michael Gabian
• Richard Bell
• George Pszczolowski
• Alexander Jacob
• Ronald Aguiar
• Walter Haluza 
• Joseph O’Connell

Chair Stintz extended special mention to the following employees who also achieved 40 years of service at the TTC during 2009 and 2010 but were unable to attend the presentation:

• Doug Steer 
• Peter Sotile
• Kenneth Rankin 
• Warren Coll
• Jeanne Robinson 
• Bruno Vena

Following the presentation and after offering words of appreciation to the foregoing long-service employees, Chair Stintz also took the opportunity to acknowledge current employees who are helping the TTC achieve its customer service goals, namely with respect to system cleanliness and assisting customers.  Chair Stintz read various excerpts from email communications of this nature that she has received from customers.
 

3. Budget Matters

Nil

4. Procurement Authorizations

a)  Procurement Authorization – Benefit Plan Carrier for Provision of Employee and Pensioner Benefits

It is recommended that the Commission approve entering into a contract with The Manufacturers Life Assurance Company (Manulife) for the provision of administrative and underwriting services for all of the TTC employee and pensioner benefit plans on the basis that:

(a) the term of the contract will be for five (5) years, effective January 1, 2012 and ending December 31, 2016; and

(b) the administration fees will be guaranteed for the entire term of the contract.  The acceptance of Manulife’s proposal will result in TTC expenses of approximately $10 million in administration fees for the five (5) year contract term; and

(c) life insurance premiums will be guaranteed for the first three (3) years of the contract; and for the remaining final two (2) years of the contract, the insurance premiums/rates and stop loss pool charges will be determined by Manulife applying appropriate weight to the TTC’s own claims experience.  The acceptance of Manulife’s proposal will result in TTC expenses of approximately $14 million in insurance premiums including stop-loss insurance for the five (5) year contract term; and

(d) since this is a joint initiative between three (3) Participants (the TTC, the City of Toronto (City) and the Toronto Police Services Board (TPSB)), and Manulife’s offer is contingent upon each of the three (3) Participants awarding Manulife a contract, approval is required by each Participant’s Board/Commission/Council. At its meeting of May 17, 2011, City Council approved the award for the City, and the TPSB is seeking approval at its June 9, 2011 meeting. 

Approved

 b) Procurement Authorization – Design Services for Wilson Facility Enhancements and Yard Expansion – Contract AW85-2

It is recommended that the Commission authorize the award of Design Services for Wilson Facility Enhancements and Yard Expansion Contract AW85-2 to AECOM Canada Ltd. in the upset limit amount of $26,000,000 over a five year contract term.

Approved

c) Procurement Authorization – Voice/Data Telecommunication Services

It is recommended that the Commission approve the issuance of contracts for a period of 51 months from July 1, 2011 until September 30, 2015 to Bell Canada (Bell), on the basis of Bell submitting the highest scoring and lowest cost proposal to the City of Toronto (City), in the upset limits of:

a) $20,582,000 for voice telecommunication services; and,

b) $3,404,000 for data telecommunication services; and,

c) $1,625,000 for legacy data telecommunication services.

Approved

d) Summary of Authorized Expenditures between $1,000,000 to $5,000,000 for the Period March 1, 2011 to March 31, 2011

It is recommended that the Commission receive this report for information.  It lists Expenditures ($1,000,000 to $5,000,000) for the period March 1, 2011to March 31, 2011 which were approved by Senior Management.

Received

5. Procurement Authorization Amendments

Nil

6. Notice Of Awards

Nil  

7. Service Matters

a) TTC Replacement of Streetcar Tracks on Queen’s Quay West

 Vice-Chair Milczyn moved that this report be deferred to the July 6, 2011 Commission Meeting.

 The motion by Vice-Chair Milczyn carried.       

8. Other Business

a) 2010 Annual Human Rights Unit Report

 It is recommended that:

1. The Commission receive this report for information; and

2. The Commission authorize forwarding this report to City Council, through the Executive Committee, for information. 
    
Approved

b) Senior Management Annual Review of the Environment, Health and Safety (EHS) Management System, Minutes of March 29, 2011

It is recommended that the Commission receive for information, the minutes of the March 29, 2011 Senior Management Annual Review of the Environment, Health and Safety (EHS) Management System. 

Received

9. New Business

Nil

10.  Correspondence

C1 – Commissioner D. Minnan-Wong requesting a report from staff at the next meeting regarding Request for Proposal (RFP) timelines for the Wheel-Trans contracts.

The Commission received the communication and referred the correspondence to staff to report back at the July Commission Meeting.

C2 – Sam Savona, Chair – Advisory Committee on Accessible Transportation (ACAT) forwarding approved minutes from the April 28, 2011 ACAT meeting.

The Commission received the communication for information.
 
C3 – Joe Clark regarding the use of video images on Wheel Trans vehicles.

The Commission received the communication and referred the correspondence to staff for appropriate action.

C4 – Dave Amoriell, Affiliated Computer Services (ACS) regarding electronic fare collection at the TTC.

The Commission received the communication for information.
(See item No. 14 for minute).

C5 – Trevor Smith, Mastercard, regarding electronic fare collection at the TTC.

The Commission received the communication for information.
(See item No. 14 for minute).

C6 – City Clerk regarding the May 17, 2011 City Council adoption of Government Management Committee Item 3.21 related to the construction of a sound barrier wall along the north limit of 1250 Eglinton Avenue West.

The Commission received the communication and referred the correspondence to Staff and Metrolinx for comment and response.

C7 – Bruce McCuaig, President and CEO, Metrolinx regarding accessibility standards with the PRESTO Fare Card System.

The Commission RECEIVED the communication and referred the correspondence to the Advisory Committee on Accessible Transportation (ACAT) for comment on the Metrolinx process and any suggestions they may have.

11. 2012 TTC Operating Budget

M. Roche, Chief Financial Officer, gave a PowerPoint presentation on this item.

The Commission received the presentation for information.

Chair Stintz moved the following motion:

1. That sub-section ‘A’ of recommendation No. 4 be struck out and replaced with the following statement:

“The preliminary 2012 Transit Operating Subsidy to the TTC”.

2. That the funding section in the report be amended by striking out “2012 Operating Subsidy Required” and inserting “Preliminary 2012 Operating Subsidy”.

The motion by Chair Stintz carried.

Commissioner Crisanti moved the following motion:

That the 2012 Operating Budget process also include a review of potential savings associated with a reduction in the number of staff positions without negatively impacting the TTC’S current service level requirements.

The motion by Commissioner Crisanti carried.

Chair Stintz moved adoption of the recommendation in the staff report, as amended.

The motion by Chair Stintz carried.

12. 2012-2016 TTC Capital Program and 10 Year Forecast

 It is recommended that the Commission:

(1) Approve the preliminary 2012-2016 Capital Program and 10 Year Forecast as described in this report and as summarized in Appendix A, including the following: 
(a) the 2012 Capital Budget in the amount of $1,095.7 million, noting that identified capital funding sources are more than sufficient to fund the 2012 capital budget request;

(b) the 2012-2016 Capital Program in the amount of $4.603 billion, noting that the capital expenditures needed to maintain the existing transit system in a state-of-good-repair over this 5 year period exceed currently identified capital funding sources by $1.336 billion;

(c) the 2012-2021 TTC Capital Forecast in the amount of $6.999 billion, noting that the capital expenditures needed to maintain the existing transit system in a state-of-good-repair over this 10 year period exceed currently identified capital funding sources by about $1.508 billion;

(d) Note that the 10 year capital funding shortfall is a continuation of the long term pattern of insufficient long-term capital funding for the TTC’s capital needs.  Over recent years, each capital budget process shows sufficient funding in the short-term and a significant lack of identified funding in the mid to long term.  Also contained in this report is a series of funding package requests for the Provincial and Federal governments that, if funded, would eliminate this 10 year shortfall;

(e) the budget for the Toronto-York Spadina Subway Extension with an estimated final cost of $2.634 billion, including $685.5 million in 2012 and $1.963 billion for the years 2012-2016;

(f) the Capital Workforce Plan summarized in this report;

(2) Confirm support for the Strategic Funding Packages outlined in this report, and direct staff, in consultation with the City of Toronto, to prepare appropriate requests to the Province of Ontario, Metrolinx, and the Government of Canada in pursuit of funds for the TTC’s base capital program needs as outlined in this report.

(3) Forward this report to the City of Toronto as the TTC’s preliminary capital budget request for approval by City Council.

(4) Forward this report to the Ontario Minister of Transportation, the Ontario Minister of Public Infrastructure Renewal, and to the Ontario Minister of Finance, for consideration of TTC’s base capital funding needs.

(5) Forward this report to the Federal Minister of Transport, Infrastructure and  Communities, for consideration of TTC’s base capital funding needs.

(6) Forward this report to Metrolinx, for consideration of TTC’s base capital funding    needs.

Approved

13. 2012 Wheel-Trans Operating Budget

It is recommended that the Commission:

1. Approve the preliminary 2012 Wheel-Trans Operating Budget as described in this report and summarized on Appendix A (attached); and

2. Note that the 2012 Wheel Trans Operating Budget includes a shortfall of $6.9 million as summarized below:

Expenditures $103.6 million
Revenues 5.7 million
$ 97.9 million
2011 Approved City Operating Subsidy   91.0 million

Shortfall  $ 6.9 million
 
3. Note that the Wheel-Trans Service Plan encompasses the following key factors:

• Eligibility Criteria and Application Process remain unchanged
• Active registrant base increasing by 16% to 52,000
• Customer trips increasing to 3.1 million reflecting a 7% increase in demand
• Accommodating 98% of trips
• No provision included in this budget for the financial impact of the yet-to-be determined collective bargaining agreements effective April 1, 2011
• No provision made in the budget for any increase in the City of Toronto’s sedan taxi meter rates
• Further integration with the conventional transit system
• Community Bus routes remain at five (5)
• Building upon scheduling enhancements and AVL technology
• Operating Budget Workforce remains unchanged at 532 positions at December 31, 2011
• The service area does not increase beyond the City of Toronto boundaries
• No impact from AODA Transportation Standards until 2013

4. Forward this report to the City of Toronto, and

5. Forward this report to the TTC’s Advisory Committee on Accessible Transportation (ACAT) for information, and

6. Forward this report to the Ontario Minister of Transportation, the Ontario Minister of Energy and Infrastructure, and the Ontario Minister of Finance, for information, and

7. Forward this report to the Federal Minister of Transport, Infrastructure, and Communities, for information, and

8. Forward this report to Metrolinx for information.

Approved

14. Electronic Fare Collection at the TTC

 Vice-Chair Milczyn moved that the following be added as a second recommendation in the Staff Report:
 
 (i) That the TTC’S upfront capital costs to implement Presto be capped at the previously budgeted amount of $47 Million.

 (ii) That until such time as a final agreement can be reached between the TTC, the Province and Metrolinx on the Presto System that the Affilliated Computer Services (ACS) Request For Proposal (RFP) be extended to remain open until November 23, 2011.

Chair Stintz moved adoption of the recommendation in the staff report, as amended.

Commissioner Palacio requested a recorded vote.

In favour: Chair Stintz, Vice-Chair Milczyn, Commissioners Augimeri, Crisanti, Di Giorgio, Kelly, Minnan-Wong, Palacio and Parker.

Opposed: Nil

The recommendation in the staff report, as amended, was approved unanimously.

15. Delegation of Authority – Procurement Authorization Amendments – Low Floor Light Rail Vehicle Contract

It is recommended that the Commission:

1. Delegate their authority for the approval of Contract Changes/Amendments in accordance with the Authorization for Expenditures and Other Commitments Policy to the Chief General Manager for the expenditure of the remaining Commission approved contract contingency/allowance of $107,907,414 for the Low Floor Light Rail Vehicle (LFLRV) project (inclusive of all applicable taxes) for spare parts, specified options and potential contract changes where the Contract Changes/Amendments are not projected to exceed the project Estimate Final Cost (EFC).

2. Note that staff will report to the Commission all amendments with a contract value higher than $2.5 million through the M&P monthly report “Summary of Authorized Expenditures” to ensure integrity of the process.

Approved

The meeting adjourned at 3:40 p.m.

Commissioners approved the TTC’s preliminary 2012 Operating, Capital and Wheel-Trans Budgets. These preliminary budgets will be forwarded to the City for review in tandem with the City’s full-scale review of core services and efficiencies. Concurrently, TTC and City staff is working to develop a multi-year plan to establish a fare/subsidy strategy. Updated and final 2012 budgets are expected to be before the Commission for approval in the fall. Here is what was approved:

Commissioners approved expenses totalling $1.51 billion, with an assumed flat-lined operating subsidy of $429.1 million. To balance its budget, the TTC would need a total subsidy of $468.1 million. The TTC is projecting a ridership level of 502 million in 2012 (3.1 per cent higher than the 487 million budgeted for 2011), while maintaining its cost-recovery rate at about 70 per cent, one of the highest in North America. The preliminary budget is facing an $85-million shortfall.

Commissioners approved a total of $1.1 billion for the 2012 portion of the 2012-2016 Base Capital Program. The budget continues to provide for state-of-good-repair projects (91 per cent of the total), legislative requirements, capacity enhancements, station and facility improvements and expansion initiatives (excludes new transit lines).

Based on current funding assumptions, capital expenditures for 2012 will be covered. However, the $4.6-billion Five-Year Capital Program, for infrastructure projects and vehicle procurement and overhauls, is facing a $1.34-billion shortfall.

Commissioners approved the 2012 Wheel-Trans Operating Budget worth $103.6 million to accommodate a seven-per-cent increase in customer trips and a 16-per-cent increase in the registrant base. The preliminary budget is facing up to a $16-million shortfall.

Commissioners approved the adoption of the GTA-wide PRESTO Farecard System subject to developing acceptable operating and financial agreements, and confirming all funding necessary to proceed with the project. Commissioners also unanimously approved that the TTC upfront capital costs to implement PRESTO be capped at the previously budgeted amount of $47 million, and that until such time as a final agreement can be reached between the TTC, the province and Metrolinx, the request for proposal for an open payments fare system, submitted by ACS Transport Solutions Inc., be extended to remain open until Nov. 23, 2011.