Staff Report #9
March 30, 2026
To All Commissioners
Re: Recosted 2026 Capital Budget Program
Recommendation
That the Commission APPROVE the recosted 2026 capital budget of $72,127,800 as summarized below noting the recosted budget reflects the previously approved 2026 capital budget program, program updates and carry forward amounts relating to deferred or active 2025 capital projects.
2026 Recosted Capital Budget
| Description | Source of Investment | Total | |||
| Capital Program Reserve | City of London | Federal and Provincial | Provincial Gas Tax | ||
| Bus replacement – 2026 | $ – | $ 15,983,300 | $ – | $ 1,790,700 | $ 17,774,000 |
| Bus expansion (ICIP) | – | 2,942,500 | 8,090,500 | – | 11,033,000 |
| Bus expansion | – | 1,003,000 | – | – | 1,003,000 |
| Facility upgrades | – | 500,000 | – | – | 500,000 |
| Fare processing equip. | – | 468,400 | – | 1,468,400 | 1,936,800 |
| Information systems | 1,000,000 | – | – | – | 1,000,000 |
| Shop & garage equip. | 240,000 | – | – | – | 240,000 |
| Service fleet replacement | 155,000 | – | – | – | 155,000 |
| Stop upgrades | 63,500 | – | – | – | 63,500 |
| Bus stop amenities (ICIP) | – | 44,700 | 122,800 | – | 167,500 |
| Fleet radio replacement | – | 312,500 | – | 312,500 | 625,000 |
| Highbury facility rebuild | – | 4,515,600 | 7,154,400 | – | 11,670,000 |
| Zero Emission Bus Pilot | – | 12,980,000 | 12,980,000 | – | 25,960,000 |
| $1,458,500 | $ 38,750,000 | $ 28,347,700 | $3,571,600 | $ 72,127,800 | |
Background
At the August 27, 2025 Commission meeting, the 2026 capital budget program of $37,046,000 was approved. A recosting exercise for both capital and operating budgets occurs at the beginning of the year after all City of London funding is confirmed and takes into consideration pricing updates, program changes as well as any prior year projects that have not been completed or deferred to the future. The following table provides a summary by project of the proposed recosted capital budget.
Summary of 2026 Recosted Capital Budget
| Description | Original Approved Budget | 2025 Carry Forward | Funding Admts | Program Updates | Total |
| Program: | |||||
| Bus replacement – 2026 | $ 17,774,000 | $ – | $ – | $ – | $ 17,774,000 |
| Bus expansion (ICIP) | 11,033,000 | – | – | – | 11,003,000 |
| Bus expansion | 1,003,000 | – | – | – | 1,003,000 |
| Facility upgrades | 500,000 | – | – | – | 500,000 |
| Fare processing equip. | – | 1,936,800 | – | – | 1,936,800 |
| Information systems | 500,000 | 500,000 | – | – | 1,000,000 |
| Shop & garage equip. | 200,000 | 40,000 | – | – | 240,000 |
| Service fleet replacement | 155,000 | – | – | – | 155,000 |
| Stop upgrades | 46,000 | 17,500 | – | – | 63,500 |
| Bus stop amenities (ICIP) | – | – | – | 167,500 | 167,500 |
| Fleet radio replacement | – | 625,000 | – | – | 625,000 |
| Highbury facility rebuild | 5,835,000 | 5,000,000 | – | 835,000 | 11,670,000 |
| Zero Emission Bus Pilot | – | 25,960,000 | – | – | 25,960,000 |
| Total | $ 37,046,000 | $ 34,079,300 | $ – | $1,002,500 | $ 72,127,800 |
| Funding: | |||||
| Provincial Gas Tax | $ 1,790,700 | $ 1,780,900 | $ – | $ – | $ 3,571,600 |
| Capital Program Reserve | 901,000 | 557,500 | – | – | 1,458,500 |
| City of London | 21,683,600 | 15,695,600 | 1,003,000 | 367,800 | 38,750,000 |
| ICIP – Provincial | 5,303,200 | 1,393,200 | – | 288.500 | 6,984,900 |
| ICIP – Federal | 6,364,500 | 1,672,100 | – | 346,200 | 8,382,800 |
| Funding TBD | 1,003,000 | – | (1,003,000) | – | |
| Senior Government | – | 12,980,000 | – | 12,980,000 | |
| Total | $ 37,046,000 | $ 34,079,300 | $ – | $1,002,500 | $ 72,127,800 |
2025 Carry Forward
The nature and scope of capital budget projects often result in the project spanning multiple years, as such, delayed or incomplete capital projects are carried forward to the following year if still warranted. The following projects, with remaining available funding noted, are necessary for carry forward into 2026 and have been reflected in the recosted capital budget program in the report recommendation:
- Fare Processing Equipment ($1,936,800)
- Information System Software & Hardware ($500,000)
- Shop and Garage Equipment ($40,000)
- Stop Upgrades ($17,500)
- Fleet Radio Replacement ($625,000)
- Highbury Facility Rebuild ($5,000,000)
- Zero Emission Bus Pilot ($25,960,000)
Given funds have been approved and set aside for the projects in prior years, there are no impacts on the current funding sources associated with these carry-forwards.
Funding Adjustments
The Bus Expansion program included in the originally approved 2026 capital budget (see Staff Report #14 – 2026-2035 Capital Budget Program, dated August 27, 2025) was split in two, one program utilizing the remaining funding available through the Investing in Canada Infrastructure Program – Public Transit Stream (ICIP) and the remaining growth bus requirements to be funded by the City of London as had been the practice prior to the receipt of ICIP funding. For the 2026 program, $1,003,000 was identified as ‘Funding TBD’, noting that administration would continue to work on identifying a source of funding to cover the shortfall. After conversations with civic administration, the capital budget established for conventional transit growth at the City does in fact support the growth requirements for 2026 beyond that of the ICIP funding.
2026 Program Updates
During the capital budget recosting process, updates to prior approved budget amounts are often necessary given unexpected cost escalations that occur after the budget setting process the prior August. All programs have been reviewed, and no material adjustments are required at this time.
The first program update pertains to the inclusion of previously unspent funding for the Bus Stop Amenities program, an ICIP funded program that included the installation of 60 bus shelters with solar lighting and 150 solar powered lights at bus stops that were identified as having low light or safety concerns. The program was completed in 2024 and was underbudget by $167,500. After conversations with the Province and civic administration during the program close out process, it has been confirmed that the unused funding may be used to purchase additional bus stop solar lights. Administration is working with the Ministry to identify potential locations for 50 additional lights.
Updates to the Highbury Facility Rebuild project of $835,000 are more housekeeping in nature and align the timing of annual cash flows of the project within the Commission’s capital budget to that which has been submitted by civic administration to the Ministry for this ICIP funded project. After detailed design work has been completed, along with an updated project costing schedule and timeline, the capital budget will be amended to better reflect expected cash flows as the project progresses. At this time, it is unknown how much of the $11,670,000 project-to-date budget will be incurred in 2026, but payments will be required once the contract has been awarded.
The Commission will be provided with regular updates on the status of the programs included in 2026 capital budget.
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager