Staff Report #7
April 29, 2020
To All Commissioners
Re: Recosted 2020 Capital Budget Program
That the Commission APPROVE the recosted 2020 capital budget of $17,686,500 as summarized below noting the recosted budget reflects the previously approved 2020 capital budget program, Operator Safety Barrier program funding update, deferral of 2020 expansion buses, and carry forward amounts relating to deferred or active 2020 capital projects.
2020 Recosted Capital Budget
|Description||Source of Investment||Total|
|Capital Program Reserve||City of London||Federal and Provincial (ICIP)||Provincial Gas Tax|
|Stop Upgrades||$ 240,700||$ –||$ –||$ –||$ 240,700|
|Software and Hardware||490,000||–||–||210,000||700,000|
|Bus Replacements (16)||–||6,867,700||–||2,620,300||9,488,000|
|Bus Expansion (4)||–||–||–||–||–|
|Bus Stop Amenities||–||146,700||403,300||–||550,000|
|Fleet Radio Replacement||–||312,500||–||312,500||625,000|
|TMP 2030 – BRT Strategy||–||–||–||1,500,000||1,500,000|
|Fare Processing Equipment||–||747,500||–||1,114,600||1,862,100|
|Smart Card Program||–||–||–||325,000||325,000|
At the August 28, 2019 Commission meeting, the 2020 capital budget program of $16,360,300 was approved. A recosting exercise for both capital and operating budgets occurs at the beginning of the year after all City of London funding is confirmed and takes into consideration pricing updates, program changes as well as any prior year projects that have not been completed or deferred to the future. The following table provides a summary by project of the proposed updated capital budget highlighting the original approved budget, updated funding sources, deferral of programs as well as 2019 projects to be carry forwarded.
Summary of 2020 Recosted Capital Budget
|Description||Original Approved Budget||Funding Updates||Program Updates||2020 Carry Forward||Total|
|Stop Upgrades||$ 440,700||$ 200,000||$ –||$ –||$ 240,700|
|Software and Hardware||200,000||–||–||500,000||700,000|
|Bus Replacement (16)||9,488,000||–||–||–||9,488,000|
|Bus Expansion (4)||3,251,600||–||(3,251,600)||–||–|
|Bus Stop Amenities||550,000||–||–||–||550,000|
|Fleet Radio Replacement||–||–||625,000||625,000|
|TMP 2030 – BRT Strategy||–||–||1,500,000||1,500,000|
|Fare Processing Equipment||500,000||(132,900)||–||1,495,000||1,862,100|
|Smart Card Program||–||–||325,000||325,000|
|Total||$ 16,360,300||$ 36,000||$(3,251,600)||$ 4,541,800||$17,686,500|
|Provincial Gas Tax||$ 3,120,300||$ 1,136,000||$ –||$ 3,095,000||$ 7,351,300|
|Capital Program Reserve||970,700||–||–||326,200||1,296,900|
|City of London||8.382,600||–||(868,200)||1,126,600||8,635,000|
|Federal and Provincial (ICIP)||2,786,700||–||(2,383,400)||–||403,300|
|Total||$16,360,300||$ 36,000||$ (3,251,600)||$ 4,541,800||$17,686.500|
The 2020 Capital Budget program included a placeholder amount of $1,100,000 with no source of funding identified for the Operator Safety Barrier program. The budget amount was based on a previously provided estimate. Administration has undertaken an assessment in an effort to identify potential sources of funding for this initiative. An alternative source was presented to the Commission (Staff Report #1, Operator Safety Barrier program, dated April 17, 2020) and was subsequently approved. The table below sets out the available sources of funding that were approved, noting additional funding may become available from either the Provincial or Federal governments that will affect the current sources of funding identified to cover the current projected operating deficit.
|Capital Project||Revision Required||Revised Budget|
|170 Operator Barriers||$1,108,900|
|Estimated Remaining Barriers||360,000|
|Fare Processing Equipment||$(132,900)|
|Stop Upgrade Program||(200,000)|
|2021 Bus Replacement Program (2 buses)||(1,136,000)|
|Provincial Gas Tax||$ 200,000|
|Capital Program Reserve||1,268,900|
The proposed reduction to the fare processing equipment program can be accommodated given this is a placeholder amount at this time. The reduction in the stop upgrade program is directly tied to the deferral of the 2020 Conventional Transit Service Plan and the ability to defer the removal/move of shelters and bus stops relating to the Plan. The reduction of two buses from the 2021 bus replacement program will only slightly impact the average fleet age, and is not anticipated to create any significant issues going forward.
Included in the original approved capital budget program was the Bus Expansion project. The required number of expansion buses is based on the service growth planned and is laid out in the Commission’s Five Year Service Plan Framework, covering the period of 2020-2024. To accommodate this level of service growth, four expansion buses were budgeted. As noted in the Recosted 2020 Operating Budget Program (Staff Report #6, April 29, 2020), given the current COVID-19 outbreak, recommendations for service improvements planned in 2020 are recommended for deferral to 2021. As such, the Bus Expansion project should also be deferred. The original budget for the purchases of four buses plus ancillary equipment was $$3,251,600 with following table setting out the funding source as approved within Phase II of the Public Transit Infrastructure funding. Funding will also be deferred until 2021.
|2020 Original Budget||Percentage|
|Federal ICIP project funding||$1,300,600||40.0%|
|Provincial ICIP project funding||1,082,800||33.3%|
|City of London||868,200||26.7%|
2019 Actual Results and Projects Carry Forwarded to 2020
Set out in Enclosure I is the Capital Program Summary for the twelve months ending December 31, 2019. As indicated in the Enclosure, a number of the projects planned for and included in the 2019 capital budget program were not completed in 2019 or have been deferred to future years. Given funds have been approved for the projects, the outstanding amounts are carried forward to 2020 where necessary. The following table summarizes the 2019 capital expenditures for outstanding projects and the corresponding carry forward amounts, including the same funding source, for inclusion in the 2020 Capital Program.
Summary of 2019 Carry Forward Capital Projects
|Software and hardware||$ 93,672||$ 600,000||$ 506,328||$ 500,000|
|Fleet radio replacement||–||625,000||625,000||625,000|
|TMP 2030 – BRT strategy||–||1,500,000||1,500,000||1,500,000|
|Smart card program||162,816||500,000||337,184||325,000|
|Shop and garage equipment||163,717||200,000||36,283||36,200|
|Facility upgrade program||439,431||500,000||60,659||60,600|
|Fare processing equipment||–||1,495,000||1,495,000||1,495,000|
|$ 859,636||$ 5,420,000||$ 4,560,364||$ 4,541,800|
|Provincial Gas Tax||$ 162,816||$ 3,270,000||$ 3,107,184||$ 3,095,000|
|Capital Program Reserve||257,389||590,000||332,611||326,200|
|City of London||439,431||1,560,000||1,120,569||1,120,600|
|Total||$ 850,636||$ 5,420,000||$ 4,560,364||$ 4,541,800|
The Commission will be provided with regular updates on the status of the programs included in 2020 capital budget.
I – 2019 Capital Program Summary
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager
2019 Capital Program Summary
2019 Capital Program Summary – Twelve Months Ending December 31, 2019
|Description||Actual||Budget||Amount Under (Over Budget)||Notes|
|Stop Upgrades||$199,096||$ 37,000||$ (162,096)||1|
|Software and Hardware||93,672||600,000||506,328||3|
|Bus Replacement (8)||4,809,573||4,748,000||(61,573)||4|
|Bus Expansion (1)||636,670||623,500||(13,170)||4|
|Fleet Radio Replacement||–||625,000||625,000||5|
|TMP 2030 – BRT Strategy||–||1,500,000||1,500,000||5|
|Fare Processing Equipment||–||1,495,000||1,495,000||5|
|Smart Card Program||162,816||500,000||337,184||3|
|Provincial Gas Tax||1,584,259||4,616,600||$3,032,341|
|Capital Program Reserve||494,280||667,000||172,720|
|City of London||2,964,231||4,084,900||1,120,669|
|Federal Gas Tax||1,500,000||1,500,000||–|
- Program completed, over budget, due to additional cement pads required for significant service changes in 2019,
- Program completed with no carry forward to 2020.
- Program not completed. Amount to be carried forward to 2020.
- Program completed, slightly over budget due to additional costs relating to the bus purchase price and ancillary equipment.
- Program deferred, amount to be carry forwarded to 2020.