Staff Report #2
August 30, 2023
To All Commissioners
Re: 2024-2027 Growth Operating Budget Program
Recommendations
The Commission PROVIDE DIRECTION with respect to the annual growth service hours for both the conventional and specialized services to be included in the Growth Business Case for consideration as part of the City’s Multi-Year Budget deliberation process.
Background
At the May 31, 2023 meeting, the Commission directed administration to prepare, for budget deliberation purposes, the following growth scenarios for Commission consideration:
- Conventional Transit Service – growth in annual service hours of 22,000, 25,000, 35,000 and 50,000 for each of the years 2024 through 2027; and
- Specialized Transit Service – growth in annual service hours of 8,000, 10,000, 16,000 and 20,000 for each of the years 2024 through 2027.
Historically, the costs associated with growing public transit services have been shared between transportation revenue (fares), Provincial Gas Tax, and City of London investment. As set out in Staff Report #1, dated August 30, 2023, the Provincial Gas Tax reserve has been depleted due to the funding drawdowns over the last multi-year budget period to cover increased expenditure items that were not anticipated in the original multi-year budget (e.g. bus price increases, insurance premium increases). As such, any growth in service hours for the 2024-2027 multi-year budget will need to be funded through a combination of transportation revenue (fares) and City of London investment.
As discussed in Staff Report #1, dated August 30, 2023, the budget approval process followed by Municipal Council sees the base budgets debated and approved separate and apart from any growth considerations. With respect to growth budgets, business cases must be prepared and submitted outlining the details of the request including which of the outcomes in the City of London Strategic Plan will be impacted as well as a detailed breakdown of the costs and measures that will be used to monitor whether the initiative is delivering as proposed. As such, the operating budget discussion has been split between two reports, one covering the status quo budget and one covering growth.
The expectation with respect to any growth business cases is that the initiatives must be included in the City of London Strategic Plan in order to be considered during the budget deliberation process. There are a number of items included in the Strategic Plan impacting the public transit services budget that will require an operating growth budget allocation to be implemented including the following:
- Wellbeing and Safety – item 1.7b – Assess opportunities to enhance garbage collection in bus shelters
- Wellbeing and Safety – item 2.3b – Provide, enhance, and promote access to municipal subsidy programs, including public transit
- Safe London for Women, Girls, and Gender-Diverse and Trans People – item 1.3b – Increase the capacity of the City of London, agencies, boards, and commissions to recognize, address, and prevent sexual violence
- Mobility and Transportation – item 1.2c – Continue to support the London Transit Commission’s Zero Emission Bus Fleet Implementation Framework
- Mobility and Transportation – item 1.3a, 1.4a and 1.6a – Support greater access to affordable, reliable public transit and paratransit through the implementation of the London Transit Commission’s 5 Year Service Plans, including growth hours
- Mobility and Transportation – item 1.4b – Support implementation of the London Transit Commission Ridership Growth Strategy initiatives
- Mobility and Transportation – item 1.6b – Support the implementation of Alternative Service Delivery options to areas of the city not currently served by transit
The growth scenarios set out later in this report for Commission consideration address the strategic outcomes listed above, the extent to which they are addressed will be subject to the extent of the growth that is ultimately approved.
The remainder of this report discusses the projected costs, outcomes and implications with each of the growth scenarios requested by the Commission for the conventional and specialized services.
Conventional Transit Services – 2024-2027 Growth Operating Budget Scenarios
The initiatives included in the City of London Strategic Plan that require growth in conventional service hours are each discussed in detail below. Each section includes administration’s recommendation with respect to what should be included in the growth budget request to adequately address each item.
Wellbeing and Safety – item 1.7b – Assess opportunities to enhance garbage collection in bus shelters – As set out in Staff Report #5 dated August 30, 2023, through the contract renewal for shelter advertising, administration requested the costs associated with enhancing the cleaning cycles for shelters. While the contractor does not provide garbage disposal nor pickup as part of their business model, they did provide a cost to increase the frequency of shelter cleaning from bi-weekly to weekly. The cost associated with this service enhancement is $107,900 per year, expressed as a decrease in the annual revenue guarantee provided under the contract.
Recommended Approach
Include an increase in City of London investment of $107,900 beginning in 2024 in the Growth Business Case presented to the City. Should this be approved, administration will work with the contractor to implement the increased cleaning cycle. Customer contacts will be monitored subsequent to the change to determine whether the increased cleaning cycle results in perceived improvements to the overall cleanliness of bus shelters.
Wellbeing and Safety – item 2.3b – Provide, enhance, and promote access to municipal subsidy programs, including public transit – Growth in the use of public transit fare subsidy programs will result in increases to the subsidy provided by the City of London (student fares, senior fares, blind fares and income related fares). Given the difficulty associated with projecting the manner in which growth in ridership will occur in each fare category, estimated impacts on each of these subsidy programs have not been included in growth projections. Growth in these programs can however be measured and reported on over the multi-year budget period.
Recommended Approach
Utilize the existing process included in the agreement between London Transit and the City of London to address any growth in subsidies required as the result of ridership growth occurring in the categories that are currently subsidized by the City of London. Growth in each fare category will be measured and reported on annually.
Safe London for Women, Girls, and Gender-Diverse and Trans People – item 1.3b – Increase the capacity of the City of London, agencies, boards, and commissions to recognize, address, and prevent sexual violence – Given the vague nature of this item, it is difficult to determine any specific growth that will be required in the operating budget to address expectations. The 2024-2027 status quo operating budget does not include any increases in employee training budgets for new programs such as this.
Recommended Approach
Exclude consideration of any growth in employee training relating to this initiative in the 2024 Growth Business Case and give consideration to including same in a future year growth business case once administration is able to better identify the impacts associated with moving forward on this initiative.
Mobility and Transportation – item 1.2c – Continue to support the London Transit Commission’s Zero-Emission Bus Fleet Implementation Framework – As has been discussed in previous reports relating to the Zero-Emission Bus Implementation, industry experience indicates that a dedicated team is required in order to ensure a smooth transition to new bus technology. The approach that has been undertaken with respect to participating in the joint procurement for a turn-key solution will somewhat mitigate the need for additional dedicated staff resources during the procurement phase; however, as work begins to get underway, resources will be required.
The status quo operating budget includes provision for a project management position and an administrative support position in 2024 which will be shared between the Zero-Emission Bus project and the Highbury Facility Rebuild Project. This shared approach will suffice in 2024 given the significant work associated with both of these projects will not occur until later years; however, staffing levels (or external resources) will be required going forward to support these projects. Moving existing staff to cover these requirements is not an option given resource capacity and the need to continue to maintain and support the current fleet of diesel buses.
The capital costs associated with this transition are included in Staff Report #3, dated August 30, 2023.
Recommended Approach
Include the provision of additional resources (staff or external resources as applicable) equivalent to one management oversight position, one dedicated technician position and one administrative support position in the 2025 Growth Budget Business Case dedicated to the Zero-Emission Bus project.
Mobility and Transportation – item 1.3a, 1.4a, 1.4b, 1.6a and 1.6b – Support greater access to affordable, reliable public transit and paratransit through the implementation of the London Transit Commission’s 5 Year Service Plans, including growth hours, London Transit Ridership Growth Strategy and Alternative Delivery Implementation Strategy – Addressing these items individually or collectively will require a growth in service hours on the conventional transit service. Given the Commission’s direction to complete a Business Plan and related Service Plan covering the period of 2025-2028 that is consistent with the growth budget allocations approved by Municipal Council for the next multi-year budget, there are no specific plans to reference this at this time. What is available for reference is a high-level summary of the outstanding service improvements from the current 5 Year Service Plan as well as those that have been identified subsequent to the plan’s approval as set out in the table below.
Conventional Transit Service Outstanding Service Improvements
| Service Improvement | Issues Addressed | Estimated Service Hour Requirement |
| Earlier service for all routes (starting at 5am) |
|
24, 000 |
| Extend remaining routes to 1 am Mon-Sat |
|
20,000 |
| Extend Sunday Service to midnight on all routes |
|
20,000 |
| Start remaining routes at 7am on Sundays |
|
18,000 |
Extend service into new growth areas including:
|
|
44,800 |
| Improve frequencies on existing routes to be no more than two times the frequency on connecting Rapid Transit routes |
|
184,000 |
| Improve operating times/frequencies of routes currently serving industrial areas |
|
13,000 |
| Total Estimated Outstanding Service Hour Requirements | 323,800 | |
It should be noted that the table above does not include all outstanding requests for new/improved service, nor the implementation of additional Alternative Service Delivery (ASD) options as identified in the Alternative Service Delivery Framework. This table is provided as an order of magnitude to assist the Commission with the determination of the annual service hour growth to be included in the growth business case for conventional transit services. Final details with respect to specific improvements will be included in the 5 Year Service Plan which will be developed later this year and tabled for Commission consideration in early 2024.
The current 5 Year Service Plan called for the implementation of an additional 18,000 hours of service each year, which represents an approximate 2.5% growth in service each year. As the table above illustrates, this level of increase is not adequate to address the outstanding service improvements over the next four year period.
The table below sets out the estimated budget requirements for the four growth scenarios requested by the Commission for 2024 noting the estimates are based on annualized hours. The impacts to subsequent years for each scenario would be limited to any inflationary impacts on the cost of service delivery. The incremental growth is not entirely linear given the need to increase administrative resources (supervisory, planning staff, maintenance staff, etc.) beyond current levels as annual growth hours increase.
2024 Budget Impacts for Conventional Transit Growth Scenarios
| 22,000 Hours | 25,000 Hours | 35,000 Hours | 50,000 Hours | |
| Transportation Revenue | $ 352,000 | $ 400,500 | $ 560,700 | $ 800,900 |
| Expenditures | 2,445,000 | 3,044,000 | 4,603,10 | 6,600,000 |
| City of London Investment | $ 2,092,500 | $ 2,643,500 | $ 4,042,400 | $ 5,799,100 |
| Incremental C/L Investment over Status Quo Budget | 3.7% | 4.7% | 7.2% | 10.4% |
| Service Hour Increase | 22,000 | 25,000 | 35,000 | 50,000 |
| Ridership Increase | 330,000 | 375,000 | 525,000 | 750,000 |
| Complement Adjustment | 15.4 | 19.9 | 31.1 | 45.8 |
The budget estimates included in the table are based on annualized costs, and should any of the scenarios be implemented, the growth in a given year transitions to the base budget for subsequent years.
Recommended Approach
When assessing the various scenarios, consideration needs to be given to what level of growth can actually be implemented in a given year. Specific to 2024, given the multi-year budget is not expected to be approved until early 2024, coupled with the incremental complement of 15.4 FTEs in addition to any required recruitment resulting from normal attrition, increasing service hours beyond 22,000 for conventional is unrealistic.
Implementation of an additional 35,000 or 50,000 annual hours represent approximately 5%-7% annual service increases respectively, represent a significant increase in the growth included in the previous multi-year budget; however, the required City of London funding to support these increases is substantial.
Another important consideration for growth in future years is the planned implementation of the rapid transit corridors, beginning in 2026 (which is covered under a separate Growth Business Case being prepared by the City of London). The introduction of service on these corridors has the potential for system-wide impacts on ridership and demand, which are difficult to predict in advance of implementation.
Finally, consideration needs to be given to the items in the City of London Strategic Plan that call for improved access to public transit services over the next four year period; however, this needs to be balanced with the caps Municipal Council has established for growth related budget requests.
Based on consideration of all of the aforementioned items, service level increases for the conventional service should range between 22,000 and 25,000 hours per year for the four year period. Either of these scenarios can be accommodated in the current bus expansion projections included in the 2024-2033 Capital Budget Projections. Administration will be prepared to provide the costs associated with scenarios being considered during budget deliberations to support a final recommendation which will include budgeted costs.
Specialized Transit Services – 2024 – 2027 Growth Operating Budget Program
The initiatives included in the City of London Strategic Plan that require growth in specialized service hours are each discussed in detail below. Each section includes administration’s recommendation with respect to what should be included in the growth budget request to adequately address each item.
Mobility and Transportation – item 1.3a, 1.4a and 1.6a – Support greater access to affordable, reliable public transit and paratransit through the implementation of the London Transit Commission’s 5 Year Service Plans, including growth hours – The current 5 Year Service Plan called for the implementation of an additional 6,000 hours of service each year, which represents an approximate 3.5% growth in service each year. In addition to the specific reference in the City’s Strategic Plan for increased hours on the specialized service, the Commission heard a delegation requesting a 10% increase in annual service hours in each of the four years covered in the multi-year budget to address the trip demand that is currently not able to be accommodated.
While there is no question that the current service hours in place on the specialized service are not meeting the demand for service, it is important to recognize that the service hours currently in place are well below those included in current budgets. This is the result of a number of factors including vehicle availability (see Staff Report #4, dated August 30, 2023) as well as employee resource availability. As set out in Staff Report #6 dated August 30, 2023, it is anticipated that service hours will reach those budgeted by late 2023 and carry forward into 2024. Operating at the full service hour allocation in the 2024 base budget will result in the provision of approximately 86,000 more trips than provided in 2023 representing a 31% increase. This is not to say that increased service hours are not required to the specialized service; however, the current service levels in place coupled with the improvement to be made are an important consideration when determining the extent to which the service needs to grow in each of the next four years.
The table below sets out the estimated budget requirements for the four growth scenarios requested by the Commission. The incremental growth is not entirely linear given the need to increase administrative resources (call takers, trip assigners, etc.) beyond current levels as annual growth hours increase.
2024 Budget Impacts for Specialized Transit Growth Scenarios
| 8,000 Hours | 10,000 Hours | 16,000 Hours | 20,000 Hours | |
| Transportation Revenue | $ 36,700 | $ 46,000 | $ 73,300 | $ 91,700 |
| Expenditures | 687,200 | 838,500 | 1,471,800 | 1,774,000 |
| City of London Investment | $ 650,500 | $ 792,500 | $ 1,398,500 | $ 1,682,300 |
| Incremental C/L Investment over Status Quo Budget | 1.2% | 1.4% | 2.5% | 3.0% |
| Service Hour Increase | 8,000 | 10,000 | 16,000 | 20,000 |
| Ridership Increase | 16,900 | 21,200 | 33,800 | 42,300 |
| Complement Adjustment | 1.0 | 1.0 | 3.0 | 3.0 |
Recommended Approach
Consistent with the approach for conventional service hour increases, the ability to implement the hours is an important consideration noting the issues experienced in 2023 with respect to the delivery of additional vehicles and the labour market issues impacting the ability of the contractor to hire drivers. This needs to be balanced with the items in the City of London Strategic Plan calling for increased access to public transit services.
Should vehicle delivery and labour market issues cease to be a factor going forward, any of the growth scenarios can be implemented. Administration will be prepared to provide the costs associated with scenarios being considered during budget deliberations to support a final recommendation which will include budgeted costs.
Mobility and Transportation – item 1.6b – Support the implementation of Alternative Service Delivery options to areas of the city not currently served by transit – Implementation of the Alternative Service Delivery plan includes consideration of the integration of the specialized and conventional services. As has been demonstrated in numerous jurisdictions that have implemented this approach, the integration between services can result in decreased reliance on specialized transit. Dependent on the extent of the decreased reliance, the resulting capacity can be utilized to address a growing customer base, or to provide on-demand services to areas of the city that are currently underserved by conventional transit.
Until such time as the service integration project is underway, it is difficult to determine the impacts it will have on demand for specialized services. The implementation of Alternative Service Delivery is included in the conventional service growth budget, and as such, nothing further needs to be included in the specialized growth budget. Going forward the success of the service integration may result in a shift of budget allocations between the services to better represent where the services are being utilized.
Recommended Approach
Given the inclusion of the implementation of Alternative Service Delivery in the conventional transit service growth budget discussed earlier in this report, there is no need to include anything further specific to the specialized service.
Reconciliation City of London Budget Presentation
Subsequent to Commission approval of the growth hours for both the conventional and specialized services as well as the other items included for consideration relating to the City of London Strategic Plan covering the period 2024-2027 growth operating budget, administration will reformat the presentation into a Growth Business Case, consistent with the standard presentation format utilized for all civic departments, boards and commissions.
Recommended by:
Mike Gregor, Director of Finance
Shawn Wilson, Director of Operations
Joanne Galloway, Director of Human Resources
Craig Morneau, Director of Fleet & Facilities
Katie Burns, Director of Planning
Concurred in by:
Kelly S. Paleczny, General Manager