Staff Report #9
November 25, 2020
To All Commissioners
Re: Financial Update – Specialized Transit Services – Operating Budget – October 31, 2020
Recommendation
That the report be NOTED and FILED.
Background
Set out in the table below is the Statement of Operations for Specialized Transit Services for the ten-month period ending October 31, 2020. The statement sets out actual to budget performance for the period.
London Transit Commission
Statement of Operations – Specialized Transit Services Ten Months Ending October 31, 2020 (000’s omitted)
| Description | Actual | Budget | Amount Better (Worse) | Explanation | Percent Better (Worse) | ||
| General Operating | COVID Impact | ||||||
| Revenue | |||||||
| Transportation | $ 216.0 | $ 605.1 | $ (389.1) | $ – | $ (389.1) | (64.3)% | |
| Province-provincial gas tax | 1,250.2 | 1,442.5 | (192.3) | (192.3) | – | (13.3)% | |
| City of London | 6,395.3 | 6,395.3 | – | – | – | 0.0 % | |
| Total revenue | 7,861.5 | 8,442.9 | (581.4) | (192.3) | (389.1) | (6.9)% | |
| Expenditure | |||||||
| Personnel cost | 909.4 | 979.2 | 69.8 | 69.8 | – | 7.1% | |
| Contract service cost | 6,182.5 | 7,231.9 | 1,049.4 | 45.3 | 1,004.1 | 14.5% | |
| All other material expense | 225.4 | 231.8 | 6.4 | 6.4 | – | 2.8% | |
| Total expenditure | 7,317.3 | 8,442.9 | 1,125.6 | 121.5 | 1,004.1 | 13.3% | |
| Net favourable/(unfavourable) | $ 544.2 | $ – | $ 544.2 | $ (70.8) | $ 615.0 | 6.4% | |
As indicated, the service has a net favourable operating budget performance to-date of 6.4% or $544,200. Of this favourable variance, $615,000 is attributable to the impacts of COVID-19 offset by $70,800 due to unfavourable general operating expenditures. An explanation of the variances is set out below.
The impacts attributed to COVID-19 in the table above are based on the assumptions of administration that have been applied from the onset of the pandemic. The COVID-19 impact noted above includes results for the period of April to September that were reported to the Ministry of Transportation as eligible expenditures under the guidelines for the Safe Restart Funding program. The submitted report also included an estimate of funding requirements for October through March 2021. Actual COVID-19 impacts for this period will be tracked and reported when the program’s funding is to be finalized.
With respect to the variances that have been attributed to COVID-19, the following explanations are provided:
Revenue
- unfavourable transportation revenue of $389,100 due to the implementation of free fares from March 20, 2020 to August 18, 2020, along with the ongoing impact of reduced ridership as a result of the continuing pandemic. Prior to the impact of COVID-19, transportation revenue had been performing to budget through mid-March; and
- unfavourable provincial gas tax (PGT) funding compared to budget as the allocation has been reduced to keep the PGT allocation to operations consistent with the budgeted 17.2% investment share.
Expenditures
- favourable labour costs of $69,800 relating to a reduction in labour hours compared to budget due to general operating impacts; and
- favourable contract service costs attributable to the reduced demand on service and thus fewer service hours due to COVID-19.
Ridership
The table below sets out actual to budget ridership and other performance related measures as well as a comparison to the same period in the previous year.
Ridership and Other Statistics Actual vs. budget
| Description | Actual | Budget | Variance | % Variance | 2019 Actual | % Variance | |
| Eligible passenger trips | 120,678 | 269,700 | (149,022) | (55.3)% | 249,503 | (51.6)% | |
| Attendant/companion trips | 11,850 | 31,300 | (19,450) | (62.1)% | 29,124 | (59.3)% | |
| Total Trips | 132,528 | 301,000 | (168,472) | (56.0)% | 278,627 | (52.4)% | |
| Average fare | $ 1.630 | 2.010 | $ (0.380) | (18.9)% | $ 1.704 | (4.3)% | |
| Service Hours | 109,849 | 128,576 | 18,728 | 14.6 % | 122,643 | 10.4 % | |
| EPT per service hour | 1.10 | 2.10 | (1.00) | (47.6)% | 2.03 | (46.0)% | |
| Total trips per service hour | 1.21 | 2.34 | (1.13) | (48.5)% | 2.27 | (46.9)% | |
| Total Registrants | 11,242 | 10,691 | 5.2 % | ||||
As noted above, the lower than budget eligible passenger trips is directly related to the COVID-19 outbreak as trips were on budget prior to that point.
Administration will continue to monitor the operating budget performance reporting on same on a monthly basis including providing recommendations as may be appropriate.
Recommended by: Mike Gregor, Director of Finance
Concurred in by: Kelly S. Paleczny, General Manager