Staff Report #2
August 29, 2018
To All Commissioners
Re: 2019 – 2028 Capital Budget Program
- APPROVE the 2019 capital budget program of $6,137,900 comprised of the following programs:
|Bus expansion – existing service area||1||$600,100|
|Information system software and hardware||$200,000|
|Shop and garage equipment||$200,000|
|Service fleet replacement||$40,000|
|Province of Ontario (Provincial gas tax)||$1,136,100|
|LTC capital program reserve fund||$477,000|
|City of London||$3,024,800|
|Federal gas tax program – C/L||$1,500,000|
noting identified funding from the City of London of $3,024,800 and Federal Gas Tax program of $1,500,000 is subject to the approval of Municipal Council as part of the City of London’s 2019 budget approval process;
2. DIRECT the administration submit the recommended 2019 capital budget program, and provisional estimates for 2020 to 2028 to civic administration consistent with the City of London’s reporting format.
The recommended 2019-2028 capital budget program as summarized in Enclosure I is predicated on a strategy that focuses investment on maintaining infrastructure in a state of good repair and providing growth capital investment necessary to support the provisional operating estimates for 2016-2019 as set out in Staff Report #1, dated August 26, 2015, and are in keeping with the Commission’s Asset Management Plan and Financial Plan, both of which were approved by the Commission at its April 29, 2015 meeting.
The following sets out discussion specific to each of the more significant areas of the capital budget program.
New Bus Program
The capital budget for the 10 year period of 2019-2028 calls for the purchase of a total of 172 new replacement and expansion buses at an estimated cost (based upon 2018 dollars) of approximately $102.4 million. As noted in the following table, replacement buses account for 160 of the total 172 buses to be acquired. It should be noted that the fast tracking by one year of seven replacement buses in each of 2018 and 2019 has not been included in this budget. Funding for these buses was approved in early 2017 as part of the Public Transit Infrastructure Funding submission.
2019-2028 New Bus Purchases
Bus Replacement Program
A key component of the fleet management strategy was the establishment of a progressive fleet replacement program targeted to reach and maintain an average fleet age of 6 years.
Based on this strategy, over the period of 2019-2028, a total of 160 replacement buses are to be purchased requiring a total investment of approximately $95.2 million. The program funding is allocated between the City of London (56%), federal gas tax program (16%), and provincial gas tax program (28%), the details of which are set out in the table below.
Summary 2019-2028 Bus Replacement Program
By the end of 2028, the fleet will have an average age of 6.1 years.
Bus Expansion (Existing and New Growth Areas)
The 2019-2028 capital budgets for bus expansion support the direction of the Five Year Route Structure and Service Guideline Review as approved by the Commission at its April 29, 2015 meeting and the Transit Network Rapid Transit Integration Strategy, as approved by the Commission at its August 31, 2016 meeting. The bus expansion program requires the addition of 12 buses bringing the total fleet to 229 buses by December 2028. The split between fleet expansion for the existing service area and for new growth areas including related funding is set out in the following table.
Summary 2019-2028 Bus Expansion Program
The expansion bus program does not include the additional bus requirements related to the implementation of bus rapid transit. The full implementation of bus rapid transit calls for the addition of a further 28 articulated buses to the LTC fleet. The budget for the bus rapid transit buses is included in the BRT business case.
Over the period of 2019-2028, the facility upgrade program calls for a cumulative investment of $50.6 million. The investment is intended to maintain the two facilities (450 Highbury Ave. N. and 3508 Wonderland Rd) in a state of good repair. The annual facility upgrade program includes building structure, building systems (heat, light, water, air, etc.) as well as grounds and has a budget of $300,000 in 2019.
In 2006, an assessment of facility needs was completed, which led to the construction of a satellite facility in west London in addition to the main facility on Highbury Ave N., and recommended the eventual demolishing and rebuilding of the Highbury facility on site, noting the existing facility is 50 plus years old and is a retrofitted factory versus a purpose built facility. The estimated cost in 2006 dollars was $45.6 million, of which the full amount has been included in the provisional budget beginning in 2022. Note however, a Strategic Assessment of LTC Facility Needs is underway and upon completion, expected in the fall of 2018, a more accurate understanding of the timing and costs will be available.
Summary particulars for the 2019-2028 facility upgrade program is set out below.
Summary 2019-2028 Facility Upgrade Program
Information System Software and Hardware
For 2019-2028, $2.0 million has been identified for both new and upgraded system software as well as for new and replacement network/server/workstation infrastructure requirements. All program initiatives are prioritized.
For 2019, $200,000 has been allocated to the program which is supported by the capital program reserve fund. The moneys have been provisionally allocated for:
- $80,000 for the ongoing replacement/upgrading of system hardware infrastructure i.e. work stations, servers, etc.; and
- $120,000 for program updating of various management information data base system upgrades
The recommended capital budget includes a placeholder amount of $200,000 per year for each year thereafter (2020-2028 inclusive). The $1.8 million over the period is funded from the capital program reserve fund. The Information System Software and Hardware program is directly linked to London Transit’s Technology Plan.
Shop and Garage Equipment
Total investment in shop and garage equipment over the 10 year period of 2019-2028 is set at $2 million. The budget provides for the purchase of new and/or replacement shop and garage equipment. Shop and garage equipment includes such items as steam cleaners, lathes, forklift, pallet trucks, lifting equipment/systems, floor sweeper/scrubber as well as bus maintenance and servicing tools. The items purchased are based upon need (for new equipment) and useful life assessment when dealing with equipment replacement. The expenditure covers shop and equipment needs at both the 450 Highbury Ave N. facility as well as the 3508 Wonderland Rd facility. The program expenditures are fully funded from the capital program reserve fund.
Service Fleet Replacement
The LTC maintains a service fleet of ten vehicles. The vehicles are used by operations staff (Inspectors), planning staff and maintenance staff e.g. mobile mechanic. The replacement of the vehicles is generally based upon a five to 10 year lifespan dependant upon the nature and use of the vehicle. The vehicles to be replaced are subject to mechanical and structural assessment. For the purpose of the 2019-2028 budget, one vehicle per year is scheduled to be replaced for a total investment over the period of $480,000. The investment is fully funded from the capital program reserve fund.
The 2019-2028 capital budget program calls for $0.370 million investment in stop upgrades. The stop upgrades program deals with the ongoing annual expansion of the passenger shelter program and installation of cement pads. The installation of passenger shelters is undertaken on a priority basis with selection being based upon a warrant system that considers boardings, service frequency and site conditions, etc.
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