TTC: Budgeting, Fares and Financials

[Amare]

Why? Inflationary increases of a nickel or dime on a token fare every year seem reasonable. Giambrone proposed the same.

Sure why not, in return the city should do the same and increase their contribution as inflation increases as well. The model is broken; with a few exceptions the city has generally reduced their subsidy over the years while riders have been forced to make up for the increased shortfall.

What i'm saying is that the funds the TTC receives between riders and the city is disproportionate. The city on the one hand has generally kept their contribution around the same level (on average) for the past number of years while the costs of operating the system increase every year. As a result, riders are forced to pay up for the increased operating costs. Generally that would be acceptable, but the city is taking their gas of the pedal in a sense and they are putting a larger burden then they should on riders.

 

[nfitz]

Sure why not, in return the city should do the same and increase their contribution as inflation increases as well.

Why would you cut the subsidy?

2015 city subsidy to TTC was $479 million. in 2004 it was $209 million. The subsidy has grown a lot more than ticket prices. A growth of $270 million on a $209 million budget in 11 years is over 8.5% a year.

 

[ksun]

Even if true - nothing can be done about that now that our racist wife-beating right-wing mayor protected the union by making them an essential service.

Where do you get this stuff? You have to do massive overtime to be a clerk making 6 figures. The 2015 budget already eliminated much of that overtime, and the 2016 continues is. There are time, stuff happens, and you need people to work overtime. I don't see how there's much savings here.

And the guy snoozing in the collections box? Who was publicly shamed, apologized, explained he had some severe medical problems (which was why he was in a booth instead of a bus), went on medical leave (so then he gets the $ without any work) ... and quickly died. I'm rather disgusted that anyone would actually raise this as an example of gravy.

Shame on you!

the point isn't about how much they earn - we all want everyone well paid - the point is whether by working for TTC those employees are enjoying higher salaries and benefits not avaiable to those in the more competitive private sector with comparable skills.
Suppose a token collector makes $55000 a year, what entitles him such pay (I don't really have a problem with the amount itself) when some teller at BMO is making $30000 a year? The required skills are essentially the same. And honestly I don't think a token collector with minimum skills should make $55000 a year, not because I love cheap labour, but because Canada is not that wealthy a country (based on the evidence that people in the private sector don't earn that much). The burden is on TTC riders.

 

[Amare]

Why would you cut the subsidy?

2015 city subsidy to TTC was $479 million. in 2004 it was $209 million. The subsidy has grown a lot more than ticket prices. A growth of $270 million on a $209 million budget in 11 years is over 8.5% a year.

Fair enough you win this one nfitz. I only had the subsidy numbers for the past 5 years, but those were part of the RoFo years so that explains a lot as to why the subsidy was stagnant/decreasing over those years.

But what I will say about all this is that it's time to explore other ways of getting a reliable, and consistent source of funding for the TTC asides from the gas tax. The model is broken, and it's based on early 2000's thinking which is clearly not (or was ever) an adequate solution.

 

[muller877]

Fair enough you win this one nfitz. I only had the subsidy numbers for the past 5 years, but those were part of the RoFo years so that explains a lot as to why the subsidy was stagnant/decreasing over those years.

But what I will say about all this is that it's time to explore other ways of getting a reliable, and consistent source of funding for the TTC asides from the gas tax. The model is broken, and it's based on early 2000's thinking which is clearly not (or was ever) an adequate solution.

Yes, the model is broken...but not just funding....also the cost structure. You can't just look at one and then ignore the other.

The problem is the TTC (and most other government agencies) has its head stuck in the sand. They have not changed their management structure nor their pay to reflect the realities in 2015 (let along 2000 nor I would say 1980). With technology companies are becoming leaner in the middle management. They also have reduced cost by making the employees more efficient, reduced the number of employees through retirement/attrition AND either stopped giving wage increases (i.e. no CPI increase) or decreased wages by outsourcing.

And this is a continuous process...not just one off.

If the TTC did a bottom-up budget approach where every cost has to be justified and scrutinized I'm sure they could find efficiencies. Just like in business there are winners and losers and unfortunately some people would lose their job or need to accept pay decreases.

IF the TTC did this process and they still needed more money for operational improvements then it would be a much easier sell. But without it they do not have the public support needed.

 

[ksun]

completely agree. If TTC like a private sector company needs to worry about cost, competition and risk of bankruptcy, then they would be able to cut a lot of the fat. however, who wants to cut cost and bring resentment when you can simply ask for higher price when the customers don't have a choice? WHo cares if wage and benefits are reasonable or there are too many staff, since it is not from my wallet any way? When offend anyone when you dont have to?

to think TTC is efficient and has no fat to cut is laughable. I can understand if one uses politics as a reason, but financially, I don't think so.

 

[pstogios]

muller877 and ksun: nicely said.

 

[dowlingm]

"Suppose a token collector makes $55000 a year, what entitles him such pay (I don't really have a problem with the amount itself) when some teller at BMO is making $30000 a year?"

Does anyone actually know what a collector makes at TTC (before overtime) and what a BMO teller makes?

I wonder what the relative incidents of violence/customer bad behaviour are between the two positions? Or the worth of a good work environment, where a bank teller works in an air conditioned open space with colleagues vs a largely solitary existence inside a enclosed cell which maybe has a rattling window-type air conditioner?

As far as other positions go, the TTC does compete with other transit agencies like Miway, DRT etc. for drivers. I don't know but presume that to a certain extent Greyhound, Ontario Northland and other coach companies in greater Toronto also look to hire drivers with the skillset the TTC demands.

 

[nfitz]

I've got an aunt who started as a teller at BMO in the 1970s - pretty sure they are making far more than $30,000 a year, despite still being a front-line employee. I daredn't ask though - seems personal.

 

[muller877]

I've got an aunt who started as a teller at BMO in the 1970s - pretty sure they are making far more than $30,000 a year, despite still being a front-line employee. I daredn't ask though - seems personal.

$13.77 an hour on average ($27,500 per year).
http://www.payscale.com/research/CA/Employer=BMO_-_Bank_of_Montreal/Salary
And they do not receive the pension, the vacation nor the health benefits that a TTC operator earns. Probably total compensation including benefits of around $35,000. And they only get inflation or less every year as a raise...often $0.

5 years ago the salary for TTC without overtime was around $60,000.
http://www.thestar.com/news/gta/2009/04/01/588_ttc_workers_on_bigbucks_list.html
So add their wage increases...about $66,000. They also have a pension, added vacation and additional health benefits. They also get paid to get to their work (even if they work at the same location day in and day out). Guessing total compensation is around $90,000-$100,000.

 

[nfitz]

That seems to be an entry level position. Even the assistant branch manager is relatively low on the food chain, and it runs up to $60,000+. Interesting that they have almost double the reports from "Assistant Branch Manager" than they do "Bank Teller".

In a private company you will see more salary increase with advancement, that you don't see in the TTC. Most of the time, the ticket collectors seem to be employees that have been around for years - and not fresh through the door.

 

[muller877]

As far as other positions go, the TTC does compete with other transit agencies like Miway, DRT etc. for drivers. I don't know but presume that to a certain extent Greyhound, Ontario Northland and other coach companies in greater Toronto also look to hire drivers with the skillset the TTC demands.

All government transit agencies have similar issues so you have to look at privcate companies for comparisons. I only found that a Greyhound US bus drivers make $21/hr ($40k/yr)
https://www.glassdoor.com/Hourly-Pay/Greyhound-Bus-Driver-Hourly-Pay-E93_D_KO10,20.htm
But again...they don't have the same benefits as a TTC employee.

 

[georgevicbell]

I am fine with fares rising by the cost of inflation. But the subsidy has to rise faster than inflation...here is why:

Fare revenue grows with ridership growth.

Subsidy does not. It's not linked to anything. So it needs to rise by inflation as a base. But it also needs to rise with ridership growth (or even better by population growth).

The bigger challenge is that because of the way the capital budget works (and capital projects in general) there will be years where we buy more busses or open new subway lines with much higher or lower operating costs. So there will be big jumps or drops in the needed subsidy and ticket prices.

In general the ttc operating budget should rise at about the same rate as the population multiplied by the inflation rate if you want a steady state system (no better or worse). Obviously then it should be rising faster than this if you want a better system. This is assuming an ideal system where people are spread out evenly...in the actual system the growth would eventually clog the existing subways and roads...so you need to increase capital spending and operating faster than inflation*growth just to keep things the way they are...and in fact if the goal is to keep all new growth off the roads you basically have to increase at inflation*(all population growth).

We are easily not spending enough on capital as it is. Operating costs need to grow much faster than they have been. Inflation*growth should be the starting point for all discussions.

Obviously there are other issues (inflation is really a bad measurement - why should we be basing transit pricing on the cost of a bag of milk?). Waste, bad actors, defective equipment, bad decisions all take a toll.

 

[rbt]

Most of the time, the ticket collectors seem to be employees that have been around for years - and not fresh through the door.

Indeed. The alternative for many ticket collectors is paid disability leave.

 

[Napoleon]

5 years ago the salary for TTC without overtime was around $60,000.
http://www.thestar.com/news/gta/2009/04/01/588_ttc_workers_on_bigbucks_list.html
So add their wage increases...about $66,000. They also have a pension, added vacation and additional health benefits. They also get paid to get to their work (even if they work at the same location day in and day out). Guessing total compensation is around $90,000-$100,000.

This is indeed a problem in transit systems the world over. In my SF experience, the BART employees were very highly compensated. Their attempt to strike at the height of California government furloughs (when other state employees were taking up to 10% pay cuts) resulted in a very public backlash. Here's some outdated 2013 data:
http://www.sfgate.com/bayarea/article/BART-workers-pay-plus-benefits-among-top-in-U-S-4723315.php
For BART, the station agents don't really do much of anything as all of the fare collection is now fully automated.

Oh, and here's a really fun link displaying salaries...maybe we should do this for Toronto?
http://blog.vctr.me/bart/

If you compare to the private world, there are not many jobs around that don't require any education or vocational skills that are so highly paid. I know these are powerful unions, but the TTC could do a much better job standing up to their unions. The ticket agents are pretty easily replaced--train drivers less so.