Board Meeting - September 16, 2011

K. Stintz (Chair), P. Milczyn (Vice-Chair), M. Augimeri, V. Crisanti, F. Di Giorgio, N. Kelly, 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 (Acting Deputy General Manager – Bus), B. Leck (General Counsel - Legal), B. Ross (Director – Corporate Communications), J. DiBiase (Director – Employment Services), M. Roche (Chief Financial Officer), M. Stambler, (Chief Planning Officer), S. Ghaly (Program Manager – Transit Expansion), K. Lee (Assistant General Secretary) and F. Stanois (Co-ordinator – Corporate Secretariat Services) were present.

N. Kelly assumed the Chair and called the meeting to order.

K. Stintz was in the Chair when the public meeting re-convened at 10:05 a.m.

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Commissioner Kelly 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 Commissioner Kelly carried.

Meeting (open to the public) – 10:05 a.m.
Committee Room 2, 2nd floor, City Hall

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1. Public Presentations

a) Amended 2012 TTC and Wheel-Trans Operating Budgets
 
Bob Kinnear, President
Amalgamated Transit Union, Local 113

Steve Munro

Hamish Wilson

David Fisher

Don Weitz

Brian Boehlert

Michael Binetti
(Submitted brief)

Roger Brook

Jamie Kirkpatrick
Toronto Environmental Alliance

Alan Yule

Emily Green

The Commission received the deputations for information
(see item no. 2(a) for minute)

b) Amended 2012-2016 Capital Program and 10-Year Forecast – Shortfall Reduction Plans

Steve Munro

Alan Yule

The Commission received the deputations for information.
(see item no. 2(b) for minute).

2. Budget Matters

a) Amended 2012 TTC and Wheel-Trans Operating Budgets

M. Roche, Chief Financial Officer, gave an overhead presentation on this item.

The Commission received the presentation for information.

Commissioner Augimeri moved the following motions:

1. That consideration of this report be referred back to staff until after the provincial election and the new provincial government is formed; and

That the referred report include a “third” budgetary component which highlights the cost projections of commission approved policy directives such as the increased costs that the essential service designation imposes on the operating budget; and the costs related to unilateral policy directions such as the “sunk costs” related to the deviation from Metrolinx’s 5 in 10 plan commonly known as “Transit City.”

The motion by Commissioner Augimeri lost.

2. That Recommendation no. 3 in the staff report be amended to include the words “and the provincial government” after the words “City of Toronto” so such recommendation now reads:

“Approve the development of a multi-year fare, service, subsidy strategy in conjunction with the City of Toronto and the provincial government, taking into consideration appropriate targets for ridership levels, service initiatives and revenue/cost ratios.”

The motion by Commissioner Augimeri carried unanimously.

3. That staff report back to the commission on the disposition of:

• The $60 million dollar surplus from 2010; and
• The $24 million fare stabilization fund.

The motion by Commissioner Augimeri carried unanimously.

4. That the Commission expresses its rejection of the 10% TTC cut.

The motion by Commissioner Augimeri lost.

Commissioner Palacio moved the following motions:

i) That the proposed TTC fare increase be deferred to the December TTC meeting, and only be considered as a last resort.

The motion by Commissioner Palacio carried.

ii) That the “Blue Night Service” be maintained as approved by the last commission “Route Service” review early this year.

The motion by Commissioner palacio carried.

iii) That the chief General Manager be requested to report back to the December meeting on creative options on the current TTC operating subsidy business model, including funding possibilities that do not rely entirely on the property tax base subsidy.

The motion by Commissioner Palacio carried.

iv) That a report be brought to the next TTC meeting on a comparative cost analysis on operating Wheel-Trans Services, including reducing the “service ratio” within the TTC Wheel-Trans and the possibility to shift dialysis patients to alternate service providers.

The motion by Commissioner Palacio carried.

Commissioner Augimeri noted her opposition to the foregoing motion.

v) A formal request be made to the provincial and federal government to increase the subsidy on the operating and capital budgets and this recommendation be forwarded to City of Toronto council for its endorsement.

The motion by Commissioner Palacio carried.

vi) That the Chief General Manager be requested to review and report back to the December TTC meeting on the role of Metrolinx and the TTC on planning/operating transit responsibilities.

The motion by Commissioner Palacio carried.

Commissioner Augimeri noted her opposition to the foregoing motion.

Vice-Chair milCzyn moved that the Chief General Manager develop a draft three-year operating budget for the years 2013-2015 for presentation to the commission in 2012.

The Motion by Vice-Chair Milczyn carried unanimously.

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

The motion by Chair Stintz carried.

Commissioner Augimeri noted her opposition to the foregoing motion.

b) Amended 2012-2016 Capital Program and 10-Year Forecast – Shortfall Reduction Plans

M. Roche, Chief Financial Officer, gave an overhead presentation on this item.

The Commission received the presentation for information.

Chair Stintz moved adoption of the recommendation contained in the staff report, as follows:

It is recommended that the commission:
 
1. Approve an amended 2012-2016 Capital Program and 10 year forecast as a result of shortfall reduction plan changes in the amount of $725.0 million as outlined in this report and as summarized in appendix a, resulting in the following revised budget requirements:

A) A 2012 Capital Budget in the amount of $1,079.8 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 $4.334 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 $1.072 billion;

C) The 2012-2021 TTC Capital Forecast in the amount of $6.274 billion, noting that the capital expenditures needed to maintain the existing transit system in a state-of-good-repair over this 10 year period still exceed currently identified capital funding sources by about $806.7 million;

2. Endorse TTC staff working with the city to pursue provincial and federal government funding to address the remaining funding shortfalls;

3. Forward this report to the city of Toronto Budget Committee as the TTC’s shortfall reduction plan for base capital funding needs;

4. Forward this report to the standing committee on finance of the House of commOns for consideration during the federal pre-budget consultations;

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 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; and

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

The motion by Chair Stintz carried.

3. Correspondence

Chair Stintz acknowledged receipt of submitted correspondence and moved that these communications be referred to staff for consideration.

The motion by chair Stintz carried.

The meeting adjourned at 12:30 p.m.    

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Commissioners approved the amended 2012 TTC and Wheel-Trans Operating Budgets, and the amended 2012-2016 Capital Program/10-Year Forecast.

The amended budgets will be forwarded to the City of Toronto Budget Committee for confirmation of the 2012 transit operating subsidies for the Operating and Wheel-Trans Budgets. TTC staff will continue to work with City staff to pursue provincial and federal government funding to address the remaining funding shortfalls in its budgets.

Among the numerous options put forward by TTC staff, approved by Commissioners, was a recommendation to save $14 million in 2012 through staffing reductions, namely 482 positions in both the Operating and Capital Budgets. Staff also recommended exploring contracting out opportunities in 2012 to help further reduce the Operating Budget.

The Commission also approved the following motions:

• The proposed 10-cent fare increase be deferred to the December meeting, and only be considered as a last resort.
• The TTC’s Blue Night Network is to be maintained.
• The Chief General Manager is to report at the December meeting creative options on the current TTC operating subsidy business model.
• TTC staff report on a comparative cost analysis on operating Wheel-Trans services at the next Commission meeting.
• The Commission formally request the provincial and federal governments to increase the subsidy to the Operating and Capital Budgets, and this recommendation be forwarded to City Council.
• The Chief General Manager is to review and report on the roles of Metrolinx and the TTC on planning/operating transit responsibilities at the December meeting.
• TTC staff to develop a draft three-year Operating Budget for the years 2013-2015 for presentation to the Commission in 2012.
• TTC staff report back to the Commission on the disposition of the $60-million surplus from 2010 and the $24-million stabilization fund.

Commissioners approved the TTC’s preliminary budgets on June 8. Here is what was amended and approved on Sept. 16:

Commissioners approved the amended 2012 TTC Operating Budget worth a total of $1.49 billion. The amended budget is still facing a $21-million shortfall, which was significantly reduced from $85 million through staff and expenditure reductions and adjustments to vehicle-loading standards.

Based on a more recent assessment of ridership trends, the TTC is projecting an all-time-high record ridership level of 503 million in 2012 despite a projected loss of approximately four million riders. This ridership decrease is due to reverting to pre-2004 loading standards that will widen arrival times between vehicles during peak and off-peak periods, which will result in increased crowding levels.

Commissioners approved the amended 2012 Wheel-Trans Operating Budget worth $95.6 million to accommodate a seven-per-cent increase in customer trips and a 16-per-cent increase in the registrant base.

The amended budget is still facing an $8-million shortfall, which was reduced from $16 million through staff reductions, expenditure savings and a policy decision to eliminate trips for ambulatory dialysis patients who do not meet the Wheel-Trans eligibility criteria. TTC staff will continue to explore potential funding sources to cover the cost of these trips.

Commissioners approved a shortfall reduction plan that reduces the $1.5-billion 10-year shortfall by $725 million through a series of project deferrals ranging from fewer new vehicles to the elimination of vehicle storage facilities to a reduction in infrastructure upgrades and improvements.

The amended multi-year capital program is still facing an $807-million shortfall. TTC and City staff will continue to pursue financial support from both the provincial and federal governments to address the remaining state-of-good-repair underfunding.

Capital funding sources are sufficient to fund the 2012 Capital Budget request for $1.1 billion.