Staff Report #7
April 28, 2021
To All Commissioners
Re: Financial Update – Conventional Transit Services – Operating Budget – March 31, 2021
Recommendation
That the report be NOTED and FILED.
Background
Set out in the table below is the Statement of Operations for Conventional Transit Services for the three-month period ending March 31, 2021. 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, 2021 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Percent Better (Worse) | |
| Revenue | |||||
| Transportation | $ 3,934.4 | $ 3,912.6 | $ 21.8 | 0.6 % | |
| Operating | 118.2 | 144.2 | (26.0) | (18.0)% | |
| Transfers from reserves | 224.3 | 281.0 | (56.7) | (20.2)% | |
| Province-provincial gas tax | 2,385.4 | 2,385.4 | – | 0.0 % | |
| City of London | 5,577.9 | 5,577.9 | – | 0.0 % | |
| Total revenue | 12,240.1 | 12,301.1 | (61.0) | (0.5)% | |
| Expenditure | |||||
| Personnel cost | 12,963.0 | 13,067.4 | 104.4 | 0.8 % | |
| Direct bus maintenance | 1,696.4 | 1,736.3 | 39.9 | 2.3 % | |
| Fuel | 1,479.1 | 1,651.3 | 172.2 | 10.4 % | |
| Facility costs | 967.5 | 982.0 | 14.5 | 1.5 % | |
| Insurance | 224.3 | 281.0 | 56.7 | 20.2 % | |
| Contribution to reserves | 58.6 | 69.0 | 10.4 | 15.1 % | |
| All other material expense | 871.5 | 990.4 | 118.9 | 2.4 % | |
| Total expenditure | 18,260.4 | 18,777.4 | 517.0 | 2.2 % | |
| Net cost | (6,020.3) | (6,476.3) | 456.0 | 2.4 % | |
| Safe restart program(1) | 6,329.3 | 6,476.3 | (147.0) | (2.3)% | |
| Net favourable/(unfavourable) | $ 309.0 | $ – | $ 309.0 | 1.6 % | |
Notes: (1) Actual safe restart allocation subject to final reconciliation and submission of claims to the Province
As set out in Staff Report #4, dated March 31, 2021, the recosted operating budget for conventional transit contains a net unfavourable “deficit” due to the ongoing impacts of operating the service through the pandemic (ridership and transportation revenue losses offset slightly by service reductions). The Safe Restart Program is projected to be relied upon for a total of $11.3 million in order to balance the annual recosted operating budget. As noted in the above table, the year-to-date budgeted allocation from Safe Restart is $6,476,300.
Given the recosted 2021 operating budget for conventional transit was updated to reflect continuing COVID-19 trends, the monthly comparisons between budget and actual results will only contain COVID-19 impacts that vary from those assumptions included in the recosted budget and will be discussed below, including any other operating variances. 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.
As indicated in the above table, the conventional service has a net favourable operating budget performance to-date of 1.9% or $309,000. An explanation of the variances is set out below.
Revenue
- favourable transportation revenue of $21,800 due to slightly higher ridership than budgeted; and
- unfavourable transfers from reserves of $56,700 due to lower than anticipated insurance claims (see offset below in Expenditures).
Expenditures
- favourable personnel costs of $104,400 due mainly to the timing of replacing vacant positions and the reduction in rehab work assignments;
- favourable fuel costs of $172,200 due to reduced prices and improved fuel mileage;
- favourable insurance costs of $56,700 due to the lower level of insurance claims received, noting an increase was included in the budget in anticipation of increased insurance deductibles in July 2020; and
- favourable other materials of $118.9
Ridership
The table below sets out actual to budget ridership performance as well as comparison to the same period in the previous year, noting that ridership numbers in 2020 began to see a significant decline in late March due to the onset of the pandemic, while 2021 has continued that trend.
Ridership Performance – Actual vs. Budget Three Months Ending March 31, 2021 (000’s omitted)
| Description | Actual | Budget | Variance | % Variance | 2020 Actual | % Variance |
| Total Passengers (000’s) | 1,484.2 | 1,478.7 | 5.5 | 0.4 % | 6,357 | (76.7)% |
| Average Fare | $ 2.644 | $ 2.646 | $ (0.002) | (0.1)% | $ 1.498 | 76.5 % |
| Revenue Service Hours | 154.1 | 153.5 | 0.6 | 0.4 % | 170.2 | (9.4)% |
| Rides/Rev Service Hour | 9.6 | 9.6 | 0.0 | 0.0 % | 37.3 | (74.2)% |
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.
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager