Staff Report #10
April 29, 2020
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – March 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 three month period ending March 31, 2020. The statement sets out actual to budget performance for the period.
London Transit Commission
Statement of Operations – Conventional Transit Services
Three Months Ending March 31, 2020
|Description||Actual||Budget||Amount Better (Worse)||Percent Better (Worse)|
|Transportation||$ 9,716.0||$ 10,077.4||$ (361.4)||(3.6)%|
|Transfers from reserves||188.6||155.4||33.2||21.4 %|
|Province – provincial gas tax||1,874.8||1,874.8||–||0.0 %|
|City of London||5,851.2||5,851.2||–||0.0 %|
|Personnel cost||12,327.5||12,458.6||131.1||1.1 %|
|Direct bus maintenance||1,882.2||1,847.4||(34.8)||(1.9)%|
|Facility costs||850.8||1,006.6||155.8||15.5 %|
|Contribution to reserves||133.7||89.7||(44.0)||(49.0)%|
|All other material expense||904.8||887.1||(17.7)||(2.0)%|
|Total expenditure||17,894.1||18,282.3||388.2||2.1 %|
|Net favourable/(unfavourable)||$ 132.5||$ –||$ 132.5||0.7 %|
As indicated, the conventional transit service to-date has a net favourable actual to budget performance of $132,500 representing approximately 0.7% of the total budget to-date of $18.3 million.
The major performance issues relate to:
- unfavourable transportation revenue of $361,400 due to the loss of revenue associated with the rear door boarding and elimination of fare collection; and
- favourable operating revenue due to higher than budgeted interest on operating and reserve fund accounts.
- favourable personnel costs due to fewer revenue service hours utilized along with other timing related payroll variances;
- favourable fuel costs ($231,000) attributed to lower fuel rates ($104,600) and less fuel consumption ($126,500). Fuel rates were higher than budget in January and started to decline in February and did so much further in March. The favourable price in fuel is most certainly impacted by the COVID-19 outbreak and reduction in fuel consumption globally. Consumption is also down given the reduction in service hours along with the efficiency in travel due to less congestion on the road; and
- favourable facility costs ($155,800) due to lower consumption in the unseasonably warmer months in the first three months of the year.
The table below sets out actual to budget ridership performance for the three months ending March 31, 2020 as well as comparison to the same period in the previous year.
|Description||Actual||Budget||Variance||% Variance||2020 Actual||% Variance|
|Total Passengers (000’s)||6,829.9||6,848.9||(19.0)||(0.3)%||6,800.3||0.4 %|
|Average Fare||$ 1.422||$ 1.471||$ (0.049)||(3.3)%||$ 1.318||7.9 %|
|Revenue Service Hours||170.2||173.1||2.9||(1.6)%||164.2||3.7 %|
|Rides/Rev Service Hour||40.1||39.6||0.6||1.4 %||41.4||(3.1)%|
As noted above, the recent COVID-19 outbreak has started to negatively impact the financials. Revenues have declined given the implementation of rear door boarding which are currently approved to be in place through April 30th. Fuel rates and consumption will just slightly offset this shortfall. Additional costs associated with bus servicing (nightly disinfecting of buses) along with increased material costs for disinfectants and hand sanitizer is also expected to continue. As more of these costs impact the variances above, the tables above will be amended to include a breakout of the COVID-19 impacts from those of ongoing operations.
Administration will continue to monitor the operating budget performance, including ridership, on a monthly basis.
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager