Staff Report #6
May 27, 2020
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – April 30, 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 four-month period ending April 30, 2020 including actual to budget performance for the period. The table has been modified to include a breakout of the resulting variances based on either general operating differences (i.e. ongoing operations) and those attributed to the COVID-19 outbreak.
London Transit Commission
Statement of Operations – Conventional Transit Services
Four Months Ending April 30, 2020
|Description||Actual||Budget||Amount Better (Worse)||Explanation||Percent Better (Worse)|
|General Operating||COVID Impact|
|Transportation||$ 9,716.0||$13,444.4||$ (3,728.4)||$ 256.4||$(3,984.8)||(27.7)%|
|Transfers from reserves||264.0||207.2||56.8||56.8||–||27.4 %|
|Province – provincial gas tax||2,499.9||2,499.9||–||–||–||0.0 %|
|City of London||7,574.5||7,574.5||–||–||–||0.0 %|
|Personnel cost||16,319.1||16,793.4||474.3||119.3||355.0||2.8 %|
|Direct bus maintenance||2,387.6||2,368.9||(18.7)||(18.7)||–||(0.8)%|
|Facility costs||1,047.9||1,189.4||141.5||126.5||15.0||11.9 %|
|Contribution to reserves||152.6||114.8||(37.8)||(37.8)||–||(33.0)%|
|All other material expense||1,050.5||1,048.2||(2.3)||9.9||(12.3)||(0.2)%|
|Total expenditure||23,116.2||24,149.6||1,033.4||268.1||765.3||4.3 %|
|Net favourable/(unfavourable)||$(2,547.0)||$ –||$ (2,547.0)||$ 672.5||$(3,219.5)||(10.5)%|
As indicated, the conventional transit service to-date has a net unfavourable actual to budget performance of $2,547,000 representing approximately 10.5% of the total budget to-date of $24.2 million. Of this unfavourable variance, $3,219,500 is attributable to the impacts of COVID-19 and is offset partially by a favourable general operating variance of $672,500.
An explanation of the two variances is set out below:
- unfavourable transportation revenue of $3,984,800 due to the loss of revenue associated with the rear door boarding and elimination of fare collection that began March 20, 2020;
- net favourable personnel costs of $355,000 due to fewer service hours and COVID-19 related absences and increased costs relating to enhanced nightly bus cleaning;
- favourable fuel costs of $407,600 due to reduced kilometers, reduced prices and better fuel economy; and
- net favourable facility and other material costs due to reduced expenditures for hydro (rate) and fare processing fees offset by additional costs for disinfectants, hand sanitizers, masks and other supplies.
- favourable transportation revenue of $256,400 due to higher than budgeted ridership prior to the onset of COVID-19;
- favourable operating revenue of $91,200 due to higher than budgeted interest on operating and reserve fund accounts (partially offset by additional contribution to these reserves);
- favourable personnel costs of $119,300 due to the timing of vacancies and other non-COVID-19 related absences;
- favourable fuel costs of $125,700 related to lower prices and better fuel mileage that was trending prior to the onset of COVID-19; and
- favourable facility costs of $126,500 due to lower consumption of natural gas during the unseasonably warmer winter months.
The table below sets out actual to budget ridership performance for the four months ending April 30, 2020 as well as comparison to the same period in the previous year, noting that ridership numbers subsequent to March 22, 2020 is based on boardings as collected by the onboard passenger counters.
|Description||Actual||Budget||Variance||% Variance||2019 Actual||% Variance|
|Total Passengers (000’s)||7,055.9||9,135.8||(2,079.9)||(22.8)%||9,110.8||(22.6)%|
|Average Fare||$ 1.377||$ 1.473||$ (0.096)||(6.5)%||$ 1.319||4.4 %|
|Revenue Service Hours||214.2||229.2||(15.0)||(6.5)%||218.3||(1.9)%|
|Rides/Rev Service Hour||32.9||39.9||(6.9)||(17.4)%||41.7||(21.1)%|
In a report outlining the COVID-19 financial impacts (see Staff Report #8 – April 29, 2020), administration projected a budget shortfall through April of approximately $3,360,000. The actual impact reported above is just slightly less at $3,219,500. At the time of writing, no additional funding sources have emerged and thus the sources identified as (i) 2020 Assessment Growth, (ii) General Operating Reserve and (iii) Energy Management Reserve are still necessary to offset the shortfall.
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