Staff Report #4
September 28, 2022
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – August 31, 2022
That the report be NOTED and FILED.
Set out in the table below is the Statement of Operations for Conventional Transit Services for the eight-month period ending August 31, 2022. The statement sets out actual to budget performance for the period.
London Transit Commission Statement of Operations – Conventional Transit Services Eight Months Ending August 31, 2022 (000’s omitted)
|Description||Actual||Budget||Amount Better (Worse)||Percent Better (Worse)|
|Transportation||$ 17,898.8||$ 18,929.4||$ (1,030.6)||(5.4)%|
|Transfers from reserves||486.1||748.0||(261.9)||(35.0)%|
|Province-provincial gas tax||6,390.0||6,390.0||–||0.0 %|
|City of London||24,560.4||24,560.4||–||0.0 %|
|Personnel cost||35,073.5||36,059.4||985.9||2.7 %|
|Direct bus maintenance||4,708.9||4,870.9||162.0||3.3 %|
|Facility costs||2,397.8||2,409.1||11.3||0.5 %|
|Contribution to reserves||362.2||201.1||(161.1)||(80.1)%|
|All other material expense||2,158.8||2,170.5||12.5||0.6 %|
|Total expenditure||54,684.4||55,044.2||359.8||0.7 %|
|Safe Restart program(1)||4,038.8||3,633.3||405.5||11.2 %|
|Net favourable/(unfavourable)||$ (367.8)||$ –||$ (367.8)||(0.7)%|
Notes: (1) Actual Safe Restart allocation subject to final reconciliation and submission of claims to the Province
As indicated in the above table, the conventional service has a net unfavourable operating budget performance to-date of 0.7% or $367,800. An explanation of the variances is set out below.
- unfavourable transportation revenue of $1,030,600 due to lower than budgeted ridership, noting the 2022 budget projected ridership to be at pre-COVID levels by July. Given that ongoing fluctuations in ridership and resulting fares are still significantly impacted by the ongoing pandemic, shortfalls in 2022 are eligible for funding from the Safe Restart program;
- favourable operating revenues due to the recent climb in interest rates, resulting in higher than budgeted interest income; and
- unfavourable transfers from reserves pertaining to lower than budgeted insurance claim costs (see Insurance expenditures), as these claims are supported by reserves.
- favourable personnel costs of $985,900 due primarily to the ongoing lower than budgeted service hours as well as the delay in replacing vacant positions;
- favourable direct bus maintenance and servicing costs of $162,000 due to mainly to the ongoing staffing challenges being faced resulting in a reduction in overall repair work;
- unfavourable fuel costs of $878,900 due mainly to increased diesel fuel prices;
- favourable insurance costs of $228,200 due to less than budgeted claim costs to date; and
- unfavourable contributions to reserves of $161,100 due to the increase in interest income earned on reserves (noted above in operating revenue).
Funding for the Safe Restart Program is $405,500 greater than planned due to the above noted transportation revenue shortfall as well as a greater level of service hour reductions than planned impacting both operator labour and fuel consumption. These COVID-19 related variances will be monitored in connection with the Safe Restart funding and overall Safe Restart Reserve Fund and separate reports will be provided detailing actual submissions to the Province.
The table below sets out actual to budget ridership performance as well as comparison to the same period in the previous year.
Ridership Performance – Actual vs. Budget Eight Months Ending August 31, 2022 (000’s omitted)
|Description||Actual||Budget||Variance||% Variance||2021 Actual||% Variance|
|Total Passengers (000’s)||7,399.6||7,972.4||(572.8)||(7.2)%||4,084.2||81.2 %|
|Average Fare||$ 2.307||$ 2.374||$ (0.067)||(2.8)%||$ 2.929||(21.3)%|
|Revenue Service Hours||402.7||421.6||18.9||4.5 %||397.9||1.2 %|
|Rides/Rev Service Hour||18.4||18.9||(0.5)||(2.8)%||10.3||79.0 %|
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