Fare increases, service reductions and staff cuts are all on the table as the Toronto Transit Commission faces a funding gap in next year's budget that could swell to more than $100-million, board chair Karen Stintz says.
Preliminary budget numbers presented to TTC commissioners on Wednesday estimate a shortfall of $39-million for 2012, mostly because of the estimated costs of carrying more passengers and increases in fuel prices. But those numbers - described by staff as a "status quo budget" - do not include the 10 per cent cuts that are expected as part of city-wide belt tightening measures or the cost of the wage deal that is still being negotiated with transit workers. With those factors added, the TTC will need to find tens of millions more in additional savings or new revenue to balance its books.
We've been told everything is on the table," Ms. Stintz said after the meeting. "We're taking it very seriously."
The commission will face some tough budget decisions in September, she said, but by that point, she hopes it will have firm numbers to consider - including the cost of wage deals with unionized workers as well as the results of a core service review and an efficiency review by consultants.
The TTC can expect its wage bill to rise by about $10-million annually for every 1-per-cent increase in wages and benefits in any new contract, the report from staff estimated. The same report also assumes the city would continue to subsidize the system to the tune of $429-million next year.
But in a year when all departments are being asked to live with 10 per cent less, Ms. Stintz confirmed after the meeting that she expects the TTC will be asked to do the same, which would add another $43-million to its funding gap.
"It is fair to say that the expectation is that we will need to cut our subsidy by 10 per cent like every other agency, board and commission," she said.
"This is part of the process. They are not small numbers and we will need to make decisions, as will every other agency, board and commission across the city."
The board passed a motion from city councillor and TTC commissioner Vincent Crisanti that asked staff to look at reducing employee levels as part of their review, provided it did not affect service.
TTC head Gary Webster said staff cuts would be a "last resort" in efforts to balance the books next year at the transit system. Mr. Webster said he is counting on the efficiency and core service reviews taking place this summer to generate additional savings. Once wage numbers and the city's contribution are known, he said the transit commission will have to consider fare levels and service standards. "I would do all of those things before I considered a staff cut," he said.
City councillor and board member Maria Augimeri predicted fare increases are inevitable, given the budget numbers. "We probably will see substantial fare hikes, and I can say I will consider them like I never have before," she said.
A 25-cent fare increase would generate between $50-million and $60-million annually, staff estimated.
The TTC gets about 95 per cent of its revenue from the fare box - far more than most systems - and each ride costs the system around $1, staff said.
New provincial legislation that makes the TTC an essential service - passed at the city's request -will likely increase wage costs, she said.
Councillor Stintz said the transit authority is hoping to increase its ad revenue - now about 5 per cent of its earnings - when a new contract is awarded next year. It also is looking for savings through rationalizing services and possibly sharing some functions such as auditing with the city. The introduction of the new Presto electronic payment system will save $10-million annually in operating costs, she said, and the introduction of new subway cars that require one instead of two operators will further reduce future costs.
TTC board approves Presto
The board of the Toronto Transit Commission has given the green light to the new Presto electronic payment system, telling staff to negotiate a deal with the province that will allow riders to tap a card, rather than fish for tokens at the fare box.
But even as they put their support behind Presto - a system designed by the province and in use in every other municipality in the GTA - commissioners decided to hedge their bets just in case negotiations with the province falter or the fall election brings a new government with different ideas to Queen's Park.
At the urging of TTC vice-chair Peter Milcyzyn, commissioners voted to put a $47-million ceiling on the city's upfront capital costs for installing the system, with the province picking up the tab for any additional spending. They also agreed to extend the life of a competing open fare proposal until Nov. 23 at the urging of the company involved.
ACS, the successful bidder on a TTC contract to develop an open standards system, asked commissioners to allow it to work with individuals involved in Presto with the hope of developing a hybrid system.
Previous TTC commissioners had snubbed the Presto system, arguing the technology falls short of the new "open standards" approach to fare collection that allows riders to use chips in their bank cards, credit cards and cellphones to pay for transit.
TTC chair Karen Stintz urged commissioners to back the Presto system, saying it does not make sense unless the largest transit system in the region is involved.
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