Staff Report #6
June 24, 2020
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – May 31, 2020
That the report be NOTED and FILED.
Set out in the table below is the Statement of Operations for Conventional Transit Services for the five-month period ending May 31, 2020 including actual to budget performance for the period. The table has been modified to include a breakout of the resulting variances based on either general operating differences (i.e. ongoing operations) and those attributed to the COVID-19 outbreak.
London Transit Commission
Statement of Operations – Conventional Transit Services
Five Months Ending May 31, 2020
|Description||Actual||Budget||Amount Better (Worse)||Explanation||Percent Better (Worse)|
|Transportation||$ 9,716.0||$16,016.9||$ (6,300.9)||$ 256.4||$(6,557.3)||(39.3)%|
|Transfers from reserves||288.1||259.0||29.1||29.1||–||11.2 %|
|Province – provincial gas tax||3,125.0||3,125.0||–||–||–||0.0 %|
|City of London||9,988.4||9,988.4||–||–||–||0.0 %|
|Personnel cost||20,211.2||21,096.6||885.4||154.9||730.6||4.2 %|
|Direct bus maintenance||2,911.0||2,888.0||(23.0)||(23.0)||–||(0.8)%|
|Facility costs||1,173.0||1,338.3||165.4||150.4||15.0||12.4 %|
|Contribution to reserves||164.8||139.9||(24.9)||(24.9)||–||(17.8)%|
|All other material expense||1,181.2||1,208.6||27.4||31.3||(3.9)||2.3 %|
|Total expenditure||28,091.0||29,913.0||1,822.0||413.3||1,408.7||6.1 %|
|Net favourable/(unfavourable)||$(4,381.2)||$ –||$ (4,381.2)||$ 767.4||$(5,148.6)||(14.6)%|
As indicated, the conventional transit service to-date has a net unfavourable actual to budget performance of $4,381,200 representing approximately 14.6% of the total budget to-date of $29.9 million. Of this unfavourable variance, $5,148,600 is attributable to the impacts of COVID-19 and is offset partially by a favourable general operating variance of $767,400.
An explanation of the two variances is set out below:
- unfavourable transportation revenue of $6,557,300 due to the loss of revenue associated with the rear door boarding and elimination of fare collection that began March 20, 2020;
- net favourable personnel costs of $730,600 due to fewer service hours and COVID-19 related absences and increased costs relating to enhanced nightly bus cleaning;
- favourable fuel costs of $667,000 due to reduced kilometers, reduced prices and better fuel economy; and
- net favourable facility and other material costs due to reduced expenditures for hydro (rate) and fare processing fees offset by additional costs for disinfectants, hand sanitizers, masks and other supplies.
- favourable transportation revenue of $256,400 due to higher than budgeted ridership prior to the onset of COVID-19;
- favourable operating revenue of $68,600 due to higher than budgeted interest on operating and reserve fund accounts (partially offset by additional contribution to these reserves);
- favourable personnel costs of $154,900 due to the timing of vacancies and other non-COVID-19 related absences;
- favourable fuel costs of $153,800 related mainly to lower prices that were trending prior to the onset of COVID-19; and
- favourable facility costs of $150,400 mainly due to lower consumption of natural gas during the unseasonably warmer heating season.
The table below sets out actual to budget ridership performance as well as comparison to the same period in the previous year, noting that ridership numbers subsequent to March 22, 2020 are based on boardings as collected by the onboard passenger counters.
Ridership Performance – Actual vs. Budget
|Description||Actual||Budget||Variance||% Variance||2019 Actual||% Variance|
|Total Passengers (000’s)||7,687.2||10,623.9||(2,936.7)||(27.6)%||10,643.9||(27.8)%|
|Average Fare||$ 1.264||$ 1.510||$ (0.246)||(16.3)%||$ 1.348||(6.2)%|
|Revenue Service Hours||256.0||281.3||(25.3)||(9.0)%||270.3||(5.3)%|
|Rides/Rev Service Hour||30.0||37.8||(7.7)||(20.5)%||39.4||(23.8)%|
Administration will continue to monitor the operating budget performance, with the focus on COVID-19 as well as general operating impacts on a monthly basis.
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager